Let's analyze the data provided in the chart step by step. We need to focus on the Marginal Cost values and how they behave as the production increases.
The Marginal Cost for producing apple pies is as follows:
- For 0 pies: \[tex]$0.00
- For 1 pie: \$[/tex]1.00
- For 2 pies: \[tex]$0.50
- For 3 pies: \$[/tex]0.25
- For 4 pies: \[tex]$0.50
- For 5 pies: \$[/tex]1.25
- For 6 pies: \[tex]$1.50
We will analyze the trend of the Marginal Cost in the initial steps to check whether the marginal cost decreases, increases, or behaves differently as production increases.
Consider the initial trend for the first three production levels:
- From 0 pies to 1 pie: Marginal Cost increases from \$[/tex]0.00 to \[tex]$1.00
- From 1 pie to 2 pies: Marginal Cost decreases from \$[/tex]1.00 to \[tex]$0.50
- From 2 pies to 3 pies: Marginal Cost decreases from \$[/tex]0.50 to \[tex]$0.25
We observe that:
1. The marginal cost initially increases when you produce 1 pie (from \$[/tex]0 to \[tex]$1.00).
2. After that point, the marginal cost decreases when you go from 1 pie to 2 pies (from \$[/tex]1.00 to \[tex]$0.50).
3. It further decreases when you go from 2 pies to 3 pies (from \$[/tex]0.50 to \$0.25).
Given the initial trend:
- First, an increase is observed (from 0.00 to 1.00).
- Then a decrease is observed in the subsequent marginal costs (from 1.00 to 0.50 to 0.25).
Therefore, the correct statement based on the given data is:
- Marginal cost initially increases as production increases.
This is the trend revealed by analyzing the first few values in the table. Thus, the statement "initially increases as production increases" is true.
