Question

The chart shows the marginal cost of producing apple pies.

A 3-column table titled The cost of pie production has 7 rows. The first column is labeled Pies produced per day with entries 0, 1, 2, 3, 4, 5, 6. The second column is labeled Total cost with entries 0, 1, 1.50, 1.75, 2.25, 3.50, 5. The third column is labeled Marginal cost with entries 0, 1, 0.50, 0.25, 0.50, 1.25, and 1.50.

This chart demonstrates that the marginal cost



initially decreases as production increases.
initially increases as production increases.
eventually decreases as production increases.
eventually increases as production decreases.

Answer 1

initially decreases as production increases.

Step-by-step explanation:

Marginal cost refers to the additional expenses incurred by producing one more unit. According to the chart, the production of the first item had a marginal cost of $1. the second item had a marginal cost of $0.50, and the third item $0.25. The marginal cost trend is on the decline.

The marginal cost starts to increase after the fourth item. It is clear that the marginal cost was initially declining but began to rise as production increased.