If a firm's marginal product of labour is rising, then adding another worker is causing:
Correct answer: A. Each additional worker to add more output than the previous one
- A. Each additional worker to add more output than the previous one
- B. Total output to fall below its previous level
- C. Average fixed cost to rise with every worker
- D. The firm's fixed inputs to become variable immediately
Explanation
A rising marginal product means the extra output from each additional worker is increasing. This can occur initially when workers specialize or use fixed resources more effectively.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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