Please explain, I am having a hard time with this.
What will ocurr to average and marginal productivity once a technological innovation is presented to the production process?
When a technological innovation is introduced to a production process, it can have both short-term and long-term effects on average and marginal productivity.
1. Average Productivity: Average productivity is the total output produced per unit of input. It is calculated by dividing the total output by the total input. The impact of technological innovation on average productivity depends on how the innovation affects the input-output relationship.
- Scenario 1: If the technological innovation leads to a significant increase in output while keeping the input constant, the average productivity will likely increase. This is because more output is being produced with the same amount of input, leading to higher productivity.
- Scenario 2: On the other hand, if the technological innovation increases the input while keeping the output constant, the average productivity may decrease. This is because more input is required to produce the same output, resulting in lower productivity.
2. Marginal Productivity: Marginal productivity refers to the additional output produced when one more unit of input is added while keeping all other inputs constant. Marginal productivity determines the rate at which output increases or decreases as inputs change.
- Scenario 1: If the technological innovation enhances the effectiveness and efficiency of the input, it is likely to increase the marginal productivity. This means that each additional unit of input will contribute more to the output, resulting in a higher marginal productivity.
- Scenario 2: Conversely, if the technological innovation disrupts the balance between inputs and outputs, it may decrease the marginal productivity. This happens when the additional input fails to produce a proportionate increase in output.
Overall, the impact of a technological innovation on average and marginal productivity depends on how it affects the input-output relationship in a production process. It can lead to improvements in productivity or create imbalances that reduce productivity. It is important to analyze the specific changes in the production process and measure the resulting impact on productivity to determine the exact outcome.