Essay About Marginal Product Of Labor And Additional Output

Economics
Economics
Marginal Product of Labor is not simply the additional output produced by the last worker hiredIn the short run the only way a firm can vary production is by changing the quantity of variable input.[3] The variable input is conventionally assumed to be labor. Output is referred to as the product of labor.[4] The total product of labor is the amount of output produced.[4] The total product curve is the short run relationship between the amount of output produced and the quantity of labor used. Capital which is fixed serves as a capacity constraint.[5] Marginal product of labor is the slope of the total product curve. Marginal product is the increase in output resulting from an incremental increase in the amount of labor employed. Increasing the amount of an input while holding other factors of production constant affects the efficiency of the entire production process. The effects can be either positive or negative. Typically at low levels of production increases in the variable input have positive effects due to specialization of labor. In these early stages each additional unit of labor produces more output than did the previous unit of labor. Thus the marginal product of labor is increasing. Graphically the total product curve is increasing and