The Marginal Product of Labor Is Measured in

Although our graphs have no information about the price of the good or the price of labor we can conclude that the firm will not want to hire a unit of labor for which marginal physical product is diminishing. The slope of the productionpossibility frontier PPF at any given point is called the marginal rate of transformation MRTThe slope defines the rate at which production of one good can be redirected by reallocation of productive resources into production of the other.

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It is also called the marginal opportunity cost of a commodity that is it is the opportunity cost of X in terms.

. Total product increases as the firm adds units of labor as long as the marginal physical product is positive zero negative.

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Marginal Product Of Labor Definition Formula Example Video Lesson Transcript Study Com