If a firm finds that increasing labor leads to a decrease in the marginal product of labor while the marginal product of capital remains stable, what is the likely cause of this effect?

When a firm increases the number of workers, it might find that each additional worker contributes less to production than the previous one. This is known as diminishing marginal returns, which happens because there are only so many machines or tools available for workers to use. For example, if a factory has five machines and adds more workers, those extra workers may have to wait for a machine to become available, making them less productive. Meanwhile, if the amount of capital, like machines, stays the same, the workers can't work as efficiently, leading to a drop in their marginal product. So, the likely cause of the decrease in the marginal product of labor is the limited availability of capital that restricts how effectively the additional workers can contribute to production.