What is marginal production theory?

Answer by  Fleshj (403)

Marginal Production was an ecomonic maxim postulated in the late 19th century and basically means munufacturing/production companies will stop hiring people when the new employees cost more than they will produce in revenue for the company. As manufacturing brings on more employees there is a point of diminishing returns for each employee hired beyond a certain level.

Answer by  raz (130)

It is a theory that is based on the principal that adding one more working unit of labor will change the total amount of revenue earned. In other words, workers will be paid based on their productivity cost and not anymore.

Answer by  tamarawilhite (17883)

With initial inputs of labor, money and time, production rises sharply. After a certain point, more inputs create only a marginal increase in production.

Answer by  Kit (558)

Analysis of each unit of additional output (good and services produced) as the result of additional input or resources (labor, capital, entrepreneurship)