Economics Q55
55The Production Manager of a manufacturing company has gathered the following information:
| Labor (L) | Total Product (TP) |
| 0 | 0 |
| 1 | 175 |
| 3 | 450 |
| 5 | 600 |
| 7 | 675 |
| 9 | 700 |
As labor is added, the firm experiences increasing returns. The number of workers where increasing marginal returns turn to diminishing marginal returns is closest to:
- Option : B
- Explanation : Marginal product = Change in total product / Change in labor. The increase in MP from 0 to 1 worker is 175. This is the only point where marginal product increases.
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