Based on the table below and the principle of diminishing returns to capital, then total packages wrapped when a fourth machine is installed must be less than ________ packages.

A)2,000
B)15,000
C)16,000
D)17,000

Question

Based on the table below and the principle of diminishing returns to capital, then total packages wrapped when a fourth machine is installed must be less than ________ packages.

A)2,000 
B)15,000 
C)16,000 
D)17,000

Quizplus · Accepted Answer

The marginal return to the first machine was 10,000 packages, the marginal return to the second machine was 3,000 packages (13,000 - 10,000)and the marginal return to the third machine was 2,000 packages (15,000 - 13,000). Thus, the marginal return to the third machine has to be less than 2,000 packages, which makes the total less than 17,000 packages.

Based on the Table Below and the Principle of Diminishing