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3.5.1 Demand for labour

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Question 3

Extract A

Marginal productivity of assembly technicians

Assembly technicians at AeroVanguard are responsible for the final calibration and high-precision soldering of autonomous delivery drones. The aerospace startup is planning to decrease the size of its technician teams rostered per assembly bay on its production floor. The firm currently schedules one more technician per shift than its direct industry competitors. The marginal productivity of this additional team member is believed to be extremely low, constrained by the fixed availability of calibrated testing jigs and high-precision laser-soldering stations. By reducing the number of technicians on shift, AeroVanguard aims to operate more cost-effectively and improve its operating profit margins.


Explain the likely impact of diminishing marginal productivity of labour on technician staffing levels at AeroVanguard. Refer to Extract A in your answer.

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3.5.1 Demand for labour Questions

  1. A Level
  2. /Economics
  3. /3.5.1 Demand for labour