When Adding Another Unit of Labor Leads to an Increase

question 115

Multiple Choice

When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing

• A)diminishing labor.
• B)diminishing output.
• C)diminishing marginal product.
• D)negative marginal product.

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Definitions:

Elasticity

An indicator of the degree to which the demand or supply for a product varies following a price change.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of consumers to price changes.

Printer

A device that converts digital documents into physical copies on paper or other printing materials.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.