Use Pic 1 for question 3 Pic 1 Q Kfixed TP L Lc 3 In Pic I

Use Pic. 1 for question 3. Pic. 1 Q. K-fixed \' TP L\' Lc 3. In Pic. I, as the amount of L decreases from L-I-C to 1-0, the marginal product of labor A. increases then decreases B. decreases then increases C. keeps increasing D. keeps decreasing 66%) s CPI

Solution

D. Keeps falling.

The marginal product of labor is the change in output that results from employing an added unit of labor. When Total Product is at the maximum, MPL falls. This is due to the fact that adding more and more workers, results in a decline in total production. The productivity of each worker falls.