[Solved] Please answer all parts of this question. a. Please describe the theory of “diminishing marginal productivity”
Please answer all parts of this question.
a. Please describe the theory of “diminishing marginal productivity”, and in your own words, explain why it is an important concept in a given hospital’s performance.
b. Please explain how diminishing marginal productivity affects a firm’s cost curves and analysis. You may use a graph to further illustrate your answer.
c. Using utility analysis and production theory, and in your own words, please explain why the demand curve for medical care is downward sloping.
d. Why do firms maximize profits by producing at the point where marginal revenue equals marginal cost? What is the rationale behind this practice?
e. Why is the concept of “margin” an important concept in economics? Please feel free to elaborate, if necessary with examples.
Expert Answer
Part a)
The law of diminishing marginal product or productivity is an economic theory. It proclaims that while increasing one input and maintaining other inputs constant initially helps in increasing the output, a further increase in the input will have a res….
OR
