Decent Donuts

-Use the data in the above table and suppose that labor is the only variable factor of production. At what level of output does the marginal cost start to rise at Decent Donuts?
A) 0 dozen donuts
B) immediately after 110 dozen donuts
C) 128 dozen donuts
D) There is not enough information given to determine when the marginal cost starts to increase.

Question

Decent Donuts
 
-Use the data in the above table and suppose that labor is the only variable factor of production. At what level of output does the marginal cost start to rise at Decent Donuts?
A) 0 dozen donuts 
B) immediately after 110 dozen donuts 
C) 128 dozen donuts 
D) There is not enough information given to determine when the marginal cost starts to increase.

Quizplus · Accepted Answer

The marginal cost starts to rise when the additional cost of producing one more unit begins to increase. This typically occurs when diminishing returns set in, which is often after a certain level of output. In this case, it is immediately after 110 dozen donuts.

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