Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Rogue can produce 15 chocolate bars per day with one employee, 35 with 2, 50 with 3 and 55 with 4 employees. Which statement is true?
A) Rogue's marginal product curve initially increases and then decreases.
B) Rogue's marginal product curve decreases continually.
C) Rogue's total product curve increases at an increasing rate.
D) Rogue's marginal product curve decreases initially and then increases.

Question

Quizplus · Accepted Answer

The marginal product curve initially increases because adding more employees leads to increased production of chocolate bars, but eventually it will decrease because there will be diminishing returns to labor.

Minneapolis Business Rogue Chocolatier Sells Specialty Chocolate Bars with a High