Posted: February 12th, 2016

# . Explain how it is possible for a firm to experience simultaneously an increasing average product but a diminishing marginal product.

Use the following table to work Problems 3 to 7. The table sets out Sue’s Surfboards’ total product schedule.

 Labor Output (workers per week) (surfboards per week) 1 30 2 70 3 120 4 160 5 190 6 210 7 220

3. Draw the total product curve.

4. Calculate the average product of labor and draw the average product curve.

5. Calculate the marginal product of labor and draw the marginal product curve.

6. a. Over what output range does Sue’s Surfboards enjoy the benefits of increased specialization and division of labor?

b. Over what output range does the firm experience diminishing marginal product of labor?

c. Over what output range does the firm experience an increasing average product of labor but a diminishing marginal product of labor?

7. Explain how it is possible for a firm to experience simultaneously an increasing average product but a diminishing marginal product.

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