2. (6 marks) Which economic concepts could be demonstrated in the following cases? The law of demand? The law of diminishing marginal productivity? Economies of scale? Diseconomies of scale? Explain briefly. I. The manager stops hiring more barista in a coffeehouse, when he/she finds that the baristas often bump into each other and spill the coffee. II. During an expansion of a coffeehouse, the manager hires baristas who focus on making specific type of coffee with specialized coffee machines.
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The manager stops hiring more baristas in a coffeehouse, when he/she finds that the baristas often bump into each other and spill the coffee. This case demonstrates the concept of diseconomies of scale. Diseconomies of scale occur when the increase in production Show more…
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