a firm has two factories, one twice as large as the second. as the number of workers at each factory increases, which factory will experience diminishing returns first
To determine which factory will experience diminishing returns first as the number of workers increases, we need to understand the concept of diminishing returns and apply it to the specific scenario.
Diminishing returns occur when the addition of more units of an input factor, such as labor, results in smaller increases in output. In essence, each additional unit of the input factor becomes less productive.
In this case, we have two factories, one twice as large as the other. Let's call the larger factory Factory A and the smaller factory Factory B.
As the number of workers increases in both factories, it is important to note that the larger factory, Factory A, will have an inherently higher capacity due to its size. This means that Factory A will be able to handle a larger workforce than Factory B.
However, when it comes to diminishing returns, the decisive factor is not the absolute size of the factory, but rather the efficiency of production. It is possible that the smaller factory, Factory B, could experience diminishing returns first if it reaches its optimal labor capacity more quickly.
To determine which factory will experience diminishing returns first, we need to consider the production processes, technology, and the specific industry in question. Different industries have different levels of economies of scale and technological advancements that can influence when diminishing returns set in.
Therefore, without further information about the production processes, technology, and specific industry of these factories, it is not possible to conclusively determine which factory will experience diminishing returns first as the number of workers increases.