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.

Explanation: marginal cost falls from $1.00 for the 1st pie to $0.50 for the 2nd and $0.25 for the 3rd, then rises after that.