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

In economics, law stating that if ace factor of production is increment while the others remain constant, the overall returns will relatively abase after a real manoeuver. Thus, for example, if more(prenominal) and more labourers ar added to proceeds a wheat field, at some spot individually supererogatory labourer will add relatively subtile takings than his predecessor did, hardly because he has slight and less of the fixed amount of land to work with. The principle, graduation instance thought to apply only to agriculture, was later accepted as an economic law underlying all productive enterprise. The diaphragm at which the law begins to ope assess is difficult to ascertain, as it varies with unwrap production technique and other factors. Marginal cost (short disappearance cost curve) and peripheral product ( fringy returns) be mutually 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 doer 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 let on that MC = W/f (L). That is, MC is the wage rate change integrity by labours b enounceline product, so that marginal cost and marginal product are inversely related. In other words as large as the marginal returns increasing, marginal cost is decreasing adding additional labourer, after the certain point, where the return start to diminishin g, the marginal cost starts to increasing.If! you want to bring about a full essay, order it on our website: OrderCustomPaper.com

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