A bakery hires a baker who can make 15 cakes per day. The bakery then decides to hire a second baker who will use the kitchen at the same time as the first baker. The bakery finds that the second baker can produce only an additional nine cakes per day. What concept does this scenario illustrate?

Question

Quizplus · Accepted Answer

The scenario illustrates the concept of Diminishing Marginal Product, which occurs when adding an additional factor of production results in a smaller increase in output. Here, the second baker's addition results in fewer cakes than the first baker could produce, demonstrating diminishing returns.

A Bakery Hires a Baker Who Can Make 15 Cakes