Comparing quarters 3 and 4, how would you characterize the relationship between increases in plant size and labor productivity ?
a) increasing returns
b) diminishing returns
c) constant returns
d) elastic or inelastic
Also, comparing these two quarters, given the production levels, which plant size should the firm select based on labor productivity (measured by average product of labor)?
a) quarter 3 plant size
b) quarter 4 plant size
c) equality efficient
Qtr.3
Demand - 5550
plant size - 6
labor hours - 7974
Production units - 3950
Average product of labor - 0.52
Qtr. 4
Demand - 4430
Plant size - 7
Labor hours - 7237
Production units - 3950
Average product of labor - 0.55