Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose a cafe with two espresso machines and one barista is very busy and customers are lined up. The one barista can produce 40 coffee
Suppose a cafe with two espresso machines and one barista is very busy and customers are lined up. The one barista can produce 40 coffee products per hour. The owner hires a second barista and total product increases to 70 units per hour; a third barista is hired and total product increases to 85 units per hour. In terms of labour, this firm is experiencing
a) diminishing marginal returns.
b) increasing marginal returns.
c) constant marginal returns.
d) diminishing total returns.
e) increasing average returns.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started