Question

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

Answer 1

Diminishing marginal product

Step-by-step explanation:

The concept of Diminishing marginal product states that there is a point at which more variable input results in initial faster rate of output growth. However later the rate of growth will start declining as more variable input is added.

In the scenario given above only one Baker can produce 15 cakes, that is 15 cakes per Baker.

As variable input increases (one more Baker is added) overall output per Baker decreases.

The additional Baker can produce 9 cakes while the old Baker can produce 15 cakes. That is a total of 24 cakes.

The average number of cakes produced per Baker is now

24 ÷ 2 = 12 cakes per Baker.

This indicates a reduction in output per baker, and exemplifies Diminishing marginal product