Problem - Suppose a chair manufacturing is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers:
|
Number of workers
|
Number of chairs
|
|
1
|
10
|
|
2
|
18
|
|
3
|
24
|
|
4
|
28
|
|
5
|
30
|
|
6
|
28
|
(a) Calculate the marginal and average product of labor for this production function. List your answers in a table.
(b) Does this production function exhibit diminishing returns to labor?