Lauren owns a bakery that produces, among other things, wedding cakes. She currently has 6 employees; with 6 employees, her bakery can produce 9 wedding cakes per day. If she hired a seventh employee, she’d be able to produce 12 wedding cakes per day. Therefore, the marginal product of the seventh employee is __________ wedding cakes.

Labor, or a labor force, is the number of workers at a producer’s facility. These Laborers utilize capital resources to produce a product. Without a labor force, a producer cannot produce.

Producers must determine the most efficient number of workers to meet their production needs.

This number is determined by analyzing the Marginal Product of Labor. This is the amount of the change in production produced by each additional worker. This change can take on three forms.

When a producer decides to higher an additional worker and, as a result, the number of items produced per worker per unit of time increases, the producer is said to be enjoying Increasing Marginal Returns.

Ecuation:

[tex]MP=\frac{Q2-Q1}{L2-L1}[/tex]

MP=Marginal Product

Q=quantity of cakes per day

L=labor force per day

[tex]MP=\frac{12-9}{7-6}[/tex]

[tex]MP=\frac{3}{1}[/tex]

[tex]MP=3[/tex]