Decent Donuts

-Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve
A) has a positive slope.
B) shows the effect of increasing marginal returns.
C) Both answers A and B are correct.
D) Neither answer A nor B is correct.

Question

Decent Donuts
 
-Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve
A) has a positive slope. 
B) shows the effect of increasing marginal returns. 
C) Both answers A and B are correct. 
D) Neither answer A nor B is correct.

Quizplus · Accepted Answer

When 122 dozen donuts are produced, the MC curve typically has a positive slope due to diminishing marginal returns, not increasing marginal returns.

Decent Donuts -Use the Data in the Table Above and Suppose That