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

In economics, law stating that if one factor of production is increase while the others remain constant, the overall returns will relatively lower after a real manoeuver. Thus, for example, if more(prenominal) and more labourers ar added to harvest a wheat field, at some spot each additional labourer will add relatively slight takings than his predecessor did, simply because he has less and less of the fixed amount of land to work with. The principle, graduation exercise thought to apply only to agriculture, was later accepted as an economic law underlying all productive enterprise. The point at which the law begins to operate is difficult to ascertain, as it varies with better production technique and other factors.
Marginal cost (short fade cost curve) and peripheral product ( fringy returns) are inversely 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 worker 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 see that MC = W/f (L). That is, MC is the wage rate change integrity by labours marginal product, so that marginal cost and marginal product are inversely related.
In other words as long as the marginal returns increasing, marginal cost is decreasing adding additional labourer, after the certain point, where the return start to diminishing, the marginal cost starts to increasing.If you want to bring about a full essay, order it on our website: Orderessay



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