What happens to the marginal product of labor as more labor is combined with fixed inputs?

The marginal product of labor refers to the additional output produced as one more unit of labor is added, holding all other factors constant (such as fixed inputs like machinery, land, etc.). When more labor is combined with fixed inputs, initially, the marginal product of labor may increase due to better utilization of the resources. However, as more and more labor is added to the fixed amount of capital, eventually, each additional worker contributes less and less to overall output.

This phenomenon is called "diminishing marginal returns." It occurs because, after a certain point, adding workers without changing the amount of fixed inputs means those workers have less capital to work with. For instance, in a factory setting, too many workers can lead to overcrowding, reduced efficiency, and a point where they get in each other's way, ultimately leading to a decline in the additional output produced by each additional worker.

This concept is foundational in economics and helps explain why firms must carefully consider their input combinations to optimize production.