Refer to Figure 13-1. As the number of workers increases, which of the following is most likely to occur in the short run?

• A. The average product of labor remains constant regardless of the number of workers.
• B. The marginal cost of production decreases indefinitely as more workers are added.
• C. The marginal product of labor initially rises and then falls due to diminishing returns.
• D. Total output decreases as more workers are hired.

Answer: (C)

Verified step by step guidance

1. Understand the concept of the marginal product of labor (MPL), which measures the additional output produced by adding one more worker while keeping other inputs fixed.
2. Recall the law of diminishing marginal returns, which states that as more units of a variable input (like labor) are added to fixed inputs, the marginal product of the variable input eventually decreases.
3. Analyze the behavior of the marginal product of labor in the short run: initially, MPL may increase due to factors like specialization and division of labor, but after a certain point, MPL starts to decline because fixed inputs limit productivity gains.
4. Recognize that the average product of labor (APL) does not remain constant; it typically rises and then falls, reflecting changes in MPL.
5. Understand that total output generally increases as more workers are hired, but at a decreasing rate after diminishing returns set in; total output does not decrease unless there is a negative effect such as overcrowding, which is not the typical short-run scenario.