What does diminishing marginal productivity in a frozen pizza company mean?
A) Hiring additional workers does not change the total output of pizza produced.
B) Hiring additional workers causes the total output of pizza to fall.
C) Hiring additional workers adds fewer and fewer pizzas to total output.
D) The average total cost of production must be decreasing.

Question

Quizplus · Accepted Answer

Diminishing marginal productivity means that each additional unit of input (such as hiring an additional worker) leads to a smaller increase in output. In the case of a frozen pizza company, this would mean that hiring each additional worker would add fewer and fewer pizzas to the total output. Option A is incorrect, as it suggests that hiring additional workers has no effect on output, which is not the case. Option B is also incorrect, as it suggests that hiring additional workers decreases output, which is unlikely in a well-functioning company. Option D is irrelevant, as it does not directly relate to the concept of diminishing marginal productivity.

What Does Diminishing Marginal Productivity in a Frozen Pizza Company