THE AMOUNT OF EMPLOYMENT WHICH MAXIMIZES THE TOTAL PRODUCTION OR AT WICH MARGINAL PRODUCT IS ZERO
To find the amount of employment that maximizes total production or at which marginal product is zero, you'll need to understand the concept of the marginal product of labor and the relationship between labor input and total production.
The marginal product of labor represents the additional output that is achieved by employing one additional unit of labor, while holding all other inputs constant. It measures the rate of change in total production with respect to labor input.
When the marginal product of labor is positive, it means that each additional unit of labor contributes positively to total production. However, as more labor is added, the marginal product eventually diminishes and may eventually turn negative.
To determine the amount of employment that maximizes total production or where the marginal product is zero, you need to find the point at which the marginal product of labor starts to decline. This point is known as the point of diminishing marginal returns.
Here's how you can find the amount of employment that maximizes total production or where the marginal product is zero:
1. Collect data: Gather information on the total production achieved at different levels of employment. This data should include the number of workers and the corresponding output achieved.
2. Calculate the marginal product: Determine the marginal product of labor by calculating the difference in total production when one additional unit of labor is employed.
3. Plot the data: Create a graph with the number of workers on the x-axis and the marginal product of labor on the y-axis. Plot the data points to visualize the relationship between labor input and marginal product.
4. Identify the point of diminishing marginal returns: Look for the point on the graph where the marginal product of labor starts to decline. This is the point where the increase in labor input no longer contributes positively to total production.
5. Determine the amount of employment: The number of workers at which the marginal product of labor becomes zero represents the amount of employment that maximizes total production. This is the point where adding more labor does not increase production any further.
By following these steps, you can find the amount of employment that maximizes total production or where the marginal product is zero.