Question

Your company produces Splagnards, a popular line of hats for Chinchillas. When you started the company and were its only employee, you could produce 30 Splagnards daily. After you hired the second through sixth employees, your total daily output became 35, 45, 60, 70, and 75 Splagnards, respectively. Given this production pattern, you would conclude that diminishing returns

Select one: a. begins with the fifth employee. b. have not occurred with this set of employees. c. set in with the second employee. d. becomes negative with the third employee.

Answer 1

Table

Q	TP	MP
1	30	30
2	35	5
3	45	10
4	60	15
5	70	10 starts Diminishing
6	75	5

Diminishing Returns occur when MP starts falling

So when L = 5th employee hired, MP starts Diminish

option A)