Question

If a restaurateur spends $61 on labor and materials to produce 8 meals and by increasing these costs to $78, he can produce 14 meals, and by increasing costs to $95, he can produce 20 meals, in terms of capital and labor, what has he done

Answer 1

Gradpoint: Negative marginal returns.~ Hope this helped.

Answer 2

If a restaurateur spends $61 on labor and materials to produce 8 meals, and increase it to $78, he can produce 14 meals and further increasing costs to $95, he can produce 20 meals. In terms of capital and labor he decreases the cost of capital and labor per meal. From 7.625$ per meal it reduces to 4.75$ per meal