A busy coffee shop hires an additional barista, enabling them to serve customers nearly twice as fast. The shop responds by hiring two more baristas. After this second round of hiring, the cost of serving each customer increases. What might explain this rise?
a. Diminishing returns of labor have set in.
b. The company is experiencing economies of scale.
c. Fixed costs are being spread over larger output.
d. Total revenues have surpassed accounting costs.
a. Diminishing returns of labor have set in.
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Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. wealth level decreases.
B. interest rates decrease.
C. expected profitability of investments decrease.
D. domestic income increases.
Which of the following is true of the shape of the short-run Phillips curve? a. It is vertical
b. It is horizontal. c. It is downward sloping. d. It is upward sloping.
Physical resource
What will be an ideal response?
Corporate profits are taxed twice because
A) taxes are collected on profits before profits are distributed to shareholders. B) the government wants to minimize the amount of tax paid on capital gains. C) it is economically efficient to reduce the amount of retained earnings. D) capital gains are not indexed to the rate of inflation.