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17 December, 20:26

A company has diminishing marginal returns. Total production is 10 units when the first worker is hired. Total production rises to 15 units when the second worker is hired.

What happens to total production when the third work is hired if the company continues to have diminishing marginal returns?

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  1. 17 December, 21:19
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    The output of first worker was 10 units. The addition of one worker adds 5 units to the total production which is less than output of first worker. This happens due to law of diminishing marginal return. When a third worker is added to the workforce, this time less than 5 units like 4 or 3 units will be added to the total production. So total production may range from 15 to 19 units due to possible addition of units, ranging from 0 to 4 units.
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