What are the sources of increasing returns and economies of scale of the recent increase in trend rate productivity experienced in the U.S.?
Please provide the best answer for the statement.
There are several sources of increasing returns and economies of scale. First, firms are able to use more specialized, and thus more productive, capital and labor to expand operations. Second, firms are able to spread the high development costs over their larger output. Third, many of the products these firms produce can satisfy a large number of customers at the same time. Software, for example, has a one-time production cost and can be sold at a relatively low cost to a large number of customers. Fourth, there are network effects from a larger portion of people using a product, thereby increasing the effectiveness of the product. This includes cell phones, the internet, and software packages. Fifth, firms gain from learning by doing and once they master a process, they benefit by being able to recreate it at a very low cost.
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a. True b. False Indicate whether the statement is true or false
Zippy Car Wash on Main Street needs at least one worker to operate. That one worker can clean 10 cars in an hour. If a second worker is present, 18 cars can be washed per hour. With three workers, 25 cars can be washed per hour. With a full staff of four workers, 30 cars can be washed per hour. What is the marginal product for number of workers at Zippy Car Wash?
a. the total number of cars that can be washed with four workers b. the cost of wages and benefits for Zippy’s workers c. the optimal staffing level for the car wash d. the per worker change in the number of cars that can be washed per hour