As more workers are hired in the short run, how does the marginal product of labor typically change?

• A. It continuously increases as more workers are added.
• B. It immediately decreases with each additional worker hired.
• C. It remains constant regardless of the number of workers hired.
• D. It initially increases due to specialization, then eventually decreases because of diminishing returns.

Answer: (D)

Verified step by step guidance

1. Understand the concept of the Marginal Product of Labor (MPL), which measures the additional output produced by hiring one more worker, holding other inputs constant.
2. Recognize that in the short run, some inputs (like capital) are fixed, so adding more workers initially allows for better specialization and division of labor, which increases the MPL.
3. Identify that after a certain point, adding more workers leads to overcrowding or inefficiencies because the fixed inputs become a constraint, causing the MPL to decrease.
4. This phenomenon is known as the Law of Diminishing Marginal Returns, which states that as more units of a variable input are added to fixed inputs, the additional output from each new unit eventually declines.
5. Therefore, the typical pattern of the MPL in the short run is that it first rises due to specialization and then falls due to diminishing returns.