Question

As the variable input labour is increased by one unit, total output falls. What would you say about the marginal productivity of labour?

Answer 1

• If total output (TP) falls when an additional unit of labour is employed, it means that the marginal productivity of labour (MP) is negative.
• When TP begins to decline, MP becomes negative. This occurs from the employment of additional workers where TP falls.
• Thus, a fall in total output due to an increase in labour clearly indicates negative marginal product of labour.