When capital is limited, the curve that represents changes in the marginal product of labor will rise to a point. From this point, the curve will decline.

1. If marginal product is decreasing, then average product must also be decreasing. 2. For a fixed-proportion technology, inputs cannot be substituted for each other in production. 3. The marginal ...

Testing theory: marginal product and wages From stlouisfed.org Economic theory tells us that, in a perfectly competitive labor market, labor should be paid according to its “marginal product.” Now, ...