Q.Explain the concept of Disguised unemployment.

Disguised unemployment = apparently employed but actually surplus workers whose marginal product is zero; removing them leaves output unchanged. Typical of Indian farms and family enterprises.

Disguised unemployment (also called hidden unemployment) exists when more people are employed in an activity than are genuinely needed to produce a given output. The surplus workers appear to be employed, but their marginal productivity is zero (or nearly zero) — meaning if they are removed from the work, total production remains the same.

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