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

In economics, law stating that if iodine factor of production is growth while the others remain constant, the overall returns will relatively cast down after a real manoeuver. Thus, for example, if more(prenominal) and more labourers ar added to product a wheat field, at some spot all(prenominal) additional labourer will add relatively frail takings than his predecessor did, plainly because he has less(prenominal) and less of the fixed amount of land to work with. The principle, graduation ferment thought to apply only to agriculture, was later accepted as an economic law underlying all productive enterprise. The blot at which the law begins to ope evidence is difficult to ascertain, as it varies with reform production technique and other factors. Marginal woo (short surpass cost curve) and peripheral product ( fringy returns) be inversely related. MC equals to dVC/dQ = dVC/dL*dL/dQ. The first term is simply the salary W of labourers, That is, adding on e more prole 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 memorise 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 unyielding as the marginal returns increasing, marginal cost is decreasing adding additional labourer, after the certain point, where the return start to diminish ing, the marginal cost starts to increasing.! If you want to bring about a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper