Production with One Variable Input (Labor) ■○ bservations 1)With additional workers, output(Q) increases, reaches a maximum, and then decreases Chapter 6 Slide 16
Chapter 6 Slide 16 ◼ Observations: 1) With additional workers, output (Q) increases, reaches a maximum, and then decreases. Production with One Variable Input (Labor)
Production with One Variable Input (Labor) ■○ bservations 2) The average product of labor(AP) or output per worker, increases and then decreases Output AP Labor Input L Chapter 6 Slide 17
Chapter 6 Slide 17 ◼ Observations: 2) The average product of labor (AP), or output per worker, increases and then decreases. L Q Labor Input Output AP = = Production with One Variable Input (Labor)
Production with One Variable Input (Labor) ■○ bservations 3)The marginal product of labor(MP), or output of the additional worker, increases rapidly initially and then decreases and becomes negative MPL= △ Output△Q △ Labor Input△L Chapter 6 Slide 18
Chapter 6 Slide 18 ◼ Observations: 3) The marginal product of labor (MP), or output of the additional worker, increases rapidly initially and then decreases and becomes negative.. L Q Labor Input Output MPL = = Production with One Variable Input (Labor)
Production with One Variable Input (Labor) utp pe Month 112 C Total Product 60 B A: slope of tangent= MP (20) B: slope of OB=AP(20 C: slope of oc= mP AP A 0123456789 10 Labor per Month hapter 6 Slide 19
Chapter 6 Slide 19 Total Product A: slope of tangent = MP (20) B: slope of OB = AP (20) C: slope of OC= MP & AP Labor per Month Output per Month 60 112 0 1 2 3 4 5 6 7 8 9 10 A B C D Production with One Variable Input (Labor)
Production with One Variable Input (Labor) atpu Observations Left of E: MP >AP AP is increasing per Month Right of E: MP AP AP is decreasing E: mP =aP AP is at its maximum 30 Marginal Product E 20 Average Product 10 0123456789 10 Labor per Month hapter 6 Slide 20
Chapter 6 Slide 20 Average Product Production with One Variable Input (Labor) 8 10 20 Outpu t per Month 0 1 2 3 4 5 6 7 9 10 Labor per Month 30 E Marginal Product Observations: Left of E: MP > AP & AP is increasing Right of E: MP < AP & AP is decreasing E: MP = AP & AP is at its maximum