With Layoffs, NPR Becomes Latest Media Outlet to Cut Jobs

Correct! - NPR provides news programs and podcasts to the public at no cost, but it earns revenue by producing advertising services. With layoffs, fewer employees will produce less advertising services and total product will decrease. All production eventually experiences diminishing marginal returns, so when the layoffs occur, NPR will experience an increase in marginal product.

Well Done! - The cost of labor is a variable cost, so when NPR lays off employees, its total variable cost decreases with no change to total fixed cost. Total cost is the sum of total variable cost and total fixed cost, so total cost decreases.