-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee
A) the bookstore is still experiencing increasing marginal returns.
B) the book store has already begun to experience diminishing marginal returns, but average product is still rising.
C) both marginal and average product have already begun to decline.
D) marginal product is at its maximum.

Question

-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee
A) the bookstore is still experiencing increasing marginal returns. 
B) the book store has already begun to experience diminishing marginal returns, but average product is still rising. 
C) both marginal and average product have already begun to decline. 
D) marginal product is at its maximum.

Quizplus · Accepted Answer

The marginal product of the third employee is 20, which is greater than the marginal product of the second employee (15). This indicates that the bookstore is still experiencing increasing marginal returns.

-The Above Table Shows the Short-Run Total Product Schedule for the Campus