When a firm hired its tenth worker, its factory output increased by four units per month. Would you expect the firm's output to increase by eight more units per month if the firm hired two more workers?
What will be an ideal response?
No. The principle of diminishing marginal returns suggests that after some point of increasing returns, each incremental worker should have a progressively lower level of marginal productivity.
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A firm that has the ability to control to some degree the price of the product it sells
A) is also able to dictate the quantity purchased. B) faces a perfectly inelastic demand curve. C) is a price maker. D) faces a demand curve that is inelastic throughout the entire range of market demand.
Suppose you solve the profit maximization problem for a single-input, price-taking producer whose technology is given by src="https://qoschin.com/media/3/ppg__cognero__Chapter_11_One_Input_and_One_Output_A_Short_Run_Producer_Model__media__59179cfd-ca3e-489f-aabb-5a92da40ce1d.PNG" style="vertical-align: -13px;" width="79px" height="38px" align="absmiddle" /> Might 
The labor demand function is 
a. Suppose 
in fact be the correct labor demand function? Explain.
b. Suppose 
Might 
in fact be the correct labor demand function? Explain.
c. Intuitively explain how (b) might arise from the profit maximization problem.
What will be an ideal response?