Which of the following statements by a restaurant owner refers to the law of diminishing marginal returns?
A)"The higher the quality of the ingredients we use, the higher the cost of producing each meal."
B)"If we double the size of our premises and double everything else - kitchen staff, serving staff, equipment - we can increase the number of meals we serve, but not to double the current levels."
C)"We can increase the number of meals we serve by just adding more kitchen staff, but each additional worker adds less meals than the previous worker because traffic in the kitchen will get worse."
D)"We can serve the same number of meals with fewer kitchen staff, but we would have to buy more labour-saving kitchen equipment."
E)"We can serve the same number of meals with less kitchen equipment, but we would have to hire more kitchen staff."

Question

Quizplus · Accepted Answer

This statement refers to the law of diminishing marginal returns because it acknowledges that adding more kitchen staff will increase the number of meals served, but each additional worker will contribute less to the overall output due to overcrowding and decreased efficiency in the kitchen. This is a classic example of diminishing marginal returns, where adding more inputs (workers) leads to less additional output than the previous input.

Which of the Following Statements by a Restaurant Owner Refers