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120
Output (q)
100
TP Slope of TP =
∆
= MP of labor
80 ∆
∆q
60
∆L
40
20
0
0 2 4 6 8 10 12
Labor (L)
35
Region of diminishing marginal
MP
30
returns to labor
25
20
15
10
5
MP
0
-5 0 2 4 6 8 10 12
Labor
-10
Ridge line B
At point b’, b’’, and b’’’ → MPK = 0
Inefficient stage of Slope of isoquant = MRTS =
production
where
K = capital & L = Labor
Inefficient stage of Q1, Q2, Q3 = output levels
production
OA & OB = Ridge lines
MPL = negative
MRTS = positive