Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The company is reaching its optimal production level and cannot utilize additional workers effectively.
B
The workers are becoming less skilled over time.
C
The company is not providing sufficient training for the new workers.
D
The fixed inputs, such as equipment or workspace, are limiting the productivity of each additional worker.
Understanding the Answer
Let's break down why this is correct
Answer
When a company hires more workers, each new worker is supposed to help produce more products. However, if the extra output from each worker starts to decrease, this is called diminishing marginal returns. This usually happens because there are not enough resources, like tools or space, for all the workers to use effectively. For example, if a bakery hires more bakers but does not buy more ovens, the bakers will have to wait to use the ovens, so they can't produce as much. Therefore, even though there are more workers, the limited resources lead to less additional output from each new worker.
Detailed Explanation
When a company hires more workers, but has the same amount of equipment or space, each worker has less to work with. Other options are incorrect because Some might think that reaching an optimal level means hiring more workers is bad; It's a common idea that workers lose skills over time.
Key Concepts
Diminishing marginal returns
Labor supply
Production optimization
Topic
Marginal Returns and Labor Supply
Difficulty
hard level question
Cognitive Level
understand
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