Suppose you run a pizza shop and currently have two employees.If you hire a third employee,your output of pizzas per day rises from 55 to 65.If you hire a fourth employee,output rises to 80 per day.A fifth and sixth employee would cause output to rise to 90 and 95 per day,respectively.Pick the correct statement:
A)Diminishing returns set in with the hiring of the fourth worker.
B)Diminishing returns set in with the hiring of the fifth worker.
C)Diminishing returns set in with the hiring of the sixth worker.
D)Diminishing returns set have not yet set in because output is still increasing.

Question

Quizplus · Accepted Answer

Diminishing returns set in with the hiring of the fifth worker because although the output still increases with the hiring of the sixth worker, the increase from 90 to 95 pizzas per day is smaller than the increase from 80 to 90 pizzas per day with the hiring of the fifth worker.

Suppose You Run a Pizza Shop and Currently Have Two