Question
When Hugsy Corp. has 41 workers, they produce 3,198 goggles, but when laid off one worker,...
- When Hugsy Corp. has 41 workers, they produce 3,198 goggles,
but when laid off one worker, they produced 3,118 goggles. (4
pts.)
- Calculate the marginal product when the company lays off one worker.
- Calculate the average product when there are 40 workers.
- If Hugsy Corp. lays off another worker, will the average product of goggles increase, decrease or remain the same? Briefly explain your answer.
Homework Answers
Answer #1
a). The marginal product is the addition made to the total product when the firm employs one more unit of the factors of product.
.
Ans: 
.
b). Average product of labour is calculated by total product is dived by the quantity of labour.
.
c). The average product would decrease if the company lays off another worker , this is because the company is the diminishing returns to scale that is the marginal product decreases as the output increases.
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