Consider the Following Two Scenarios

question 44

Essay

Consider the following two scenarios:
i)The marginal product of a worker in a firm is 10 units.When an additional worker is employed,his marginal product is less than 10 units.
ii)The average total cost of a firm producing 10 units of output is $200.When it produces an additional unit,the average total cost increases to $300.
a)What is the difference between these scenarios?
b)What could be the reason behind both phenomena occurring?
c)Does specialization explain either of the two scenarios?

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Definitions:

Customer-Driven Changes

Modifications or improvements to a product or service based on feedback or demands from customers.

Manufacturing and Service Sectors

Two broad areas of the economy; manufacturing involves producing goods, while services entail providing non-physical assistance to consumers or businesses.

Human Resource Planning

The process of forecasting an organization’s future demand for, and supply of, the right type of people in the right number.

Short-Term Change

Alterations or adjustments within an organization that are expected to take place or have effects over a brief period.