Bozo is a clown. He wants to start a clowning business where he sends other clow

Question

Bozo is a clown. He wants to start a clowning business where he sends other clowns out to birthday parties. You may use the graph to help you answer the questions, but the graph will not be graded.

What is the marginal product of the 3rd unit of labor? (You need only consider integer quantities of inputs.) This production function demonstrates: Diminishing marginal product of labor A negative marginal product of labor Diminishing output Diminishing marginal costs If you need to reset the graph to its original state, click on the graph, and then click on the button that looks like this

Explanation / Answer

The marginal product of the 3rd unit of labor is related to how many additional parties you can perform after adding the third clown (as opposed to two clowns)

2 Clowns = 7 Parties

3 Clowns = 9 Parties

So the marginal product is 2 parties.

This graph represents diminishing marginal product of lab, as each successive clown added yields fewer parties than the previous clown added.

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