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When Hugsy Corp. has 41 workers, they produce 3,198 goggles, but when laid off one worker,...

  1. When Hugsy Corp. has 41 workers, they produce 3,198 goggles, but when laid off one worker, they produced 3,118 goggles. (4 pts.)
    1. Calculate the marginal product when the company lays off one worker.

  1. Calculate the average product when there are 40 workers.

  1. If Hugsy Corp. lays off another worker, will the average product of goggles increase, decrease or remain the same? Briefly explain your answer.

Business   Economics   
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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.

  

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b). Average product of labour is calculated by total product is dived by the quantity of labour.

  

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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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