PRC-3 · Chapter 12 · Question 4 of 69
In the third stage of the Law of Variable Proportions, an overcrowded factory hires an additional worker. The factory is so congested that workers get in each other's way, and total production actually falls. What is the Marginal Product (MP) of this latest worker?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Negative
Explanation
In Stage III (Negative Returns), the addition of another variable unit causes total production to decline, which mathematically means the marginal product of that unit is negative.
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