Question

A company has increasing marginal returns. Total production is 5 units when the first worker is hired. Total production rises to 12 units when the second worker is hired. What must happen to total production when the third work is hired if the company is to maintain increasing marginal returns?

Answer 1

Answer:

Total production should be greater or equals to 20 units.

Explanation:

Increasing marginal returns is an improvement in the quantity of goods produced by a company and it typically occurs over the short period of time when the amount of a variable input is initially added to a fixed input.

so given that total production increases when the first and the second workers were hired, therefore total production should be more than 20 units