This partial production function shows how output increases as
more capital is being employed while work-hours remain fixed. Its
graph is obtained by placing a vertical cut through the 3D production
function parallel to the axis measuring the capital stock.
The slope of the partial production function measures how much output
is gained by a given small increase of the capital stock. This slope
is called the marginal product of capital. The two tangency lines
measure this marginal product of capital at K1 and K2.
They indicate that the marginal product of capital becomes smaller
and smaller as the capital stock rises.
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