Journal Topic 14 - Productivity Experiment

In the beginning, with only one worker, the production was really slow. Then, when there’s a second worker, the production gradually becomes faster. After 4 and 5 workers come in to join the company, the company still has a increasing and accumulating production. However, until the sixth worker, law of diminish returns appear because one the one more member join. That one member is useless to the company because the company has already fulfilled the requirements to produce to the maximum in the fifth worker. Division of labor isn’t really efficient also because Jimmy Chuang doesn’t assign the work really well, and he didn’t recognize people’s specializations. However, after some gaining experiences from Jimmy, he assign people who are better at cutting folding or stamping, which is giving people their specializations. Things weren’t expected people our company’s workers started the job when the company hasn’t open yet, so it’s inaccurate. No surprise at all. In a short run people should adjust one of the variable cost such as how many workers should work in their company, because if there’s too many workers in a company, the company might faces the law of diminish returns. In a long run, they should worry about all their variable cost including all of the factor of production such as how many labor to get, how many capital should they use to maximize their total revenue, and how to use their entrepreneurship.