CA Foundation · Business Economics · Theory of Production and Cost
A manufacturing firm observes that when it increases labour input from 5 workers to 6 workers while keeping capital constant, total output rises from 100 units to 108 units. What is the marginal product of the 6th worker?
Marginal product of the 6th worker is 8 units. This is calculated as the change in total output (108 - 100) divided by the change in labour input (6 - 5), which equals 8 units.
- A8 unitsCorrect
- B18 units
- C108 units
- D13.5 units
Explanation
Marginal product is the additional output from one more unit of input. The 6th worker adds (108 - 100) = 8 units of output. Option 1 (18) would be if we miscalculated as 100+8. Option 2 (108) confuses total with marginal product. Option 3 (13.5) would result from dividing total output by number of workers.
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