Question
In general, the cost of an input: 1. decreases when you've reached the point of diminishing...
In general, the cost of an input:
1. decreases when you've reached the point of diminishing marginal product in your firm.
2. stays the same when you've reached the point of diminishing marginal product in your firm.
3. increases when you've reached the point of diminishing marginal product in your firm.
4. is minimized when you've reached the point of diminishing marginal product in your firm.
Homework Answers
Answer #1
Since marginal product is the additional output produced by hiring an additional unit of labor.
MPL initially increases, then reaches at maximum and then starts falling and when it starts falling, this is known as the diminishing Marginal product of labor.
marginal cost is the additional cost which arises when an additional unit of labor is hired.
MC initially starts falling, then reaches at minimum and after that starts increasing.
When MPL is maximum and MPL starts decreasing from this point, then MC is minimum.
Hence it can be said that In general, the cost of an input is minimized when you've reached the point of diminishing marginal product in your firm.
Hence option 4 is the correct answer.
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