Carefully Explain, Using Appropriate Diagrams and Figures, the Relationship Between the Law of Diminishing...

In economics, law stating that if genius factor of production is sum up while the others remain constant, the overall returns will relatively dismay after a real manoeuver. Thus, for example, if more(prenominal) and more labourers ar added to growth a wheat field, at some spot sepa regulately additive labourer will add relatively lean takings than his predecessor did, merely because he has slight and less of the fixed amount of land to work with. The principle, graduation crop thought to apply only to agriculture, was later accepted as an economic law underlying all productive enterprise. The excite at which the law begins to operate is difficult to ascertain, as it varies with break production technique and other factors. Marginal monetary value (short go by cost curve) and peripheral product ( fringy returns) ar in return related. MC equals to dVC/dQ = dVC/dL*dL/dQ. The first term is simply the salary W of labourers, That is, adding one more actor adds that workers wage to variable cost.

The second term, dL/dQ= 1/f (L) = 1/(dQ/dL), the number of workers required to produce one more unit of output is the inverse of the increase in output created by an additional worker. Combining these two results, we look at that MC = W/f (L). That is, MC is the wage rate change integrity by labours fringy product, so that marginal cost and marginal product are inversely related. In other words as enormous as the marginal returns increasing, marginal cost is decreasing adding additional labourer, after the certain point, where the return start to diminishing, the marginal cos t starts to increasing.If you want to bring! about a full essay, nightclub it on our website: OrderCustomPaper.com

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