The Law of Diminishing Marginal Returns in Floral Arrangements

What principle explains why the marginal cost per floral arrangement increases as the number of arrangements increases?

The principle that explains why the marginal cost per floral arrangement increases as the number of arrangements increases is the law of diminishing marginal returns.

Answer:

The principle that explains why the marginal cost per floral arrangement increases as the number of arrangements increases is the law of diminishing marginal returns.

The law of diminishing marginal returns states that as more units of a variable input are added to a fixed input, the marginal product of the variable input eventually begins to decline. In the case of floral arrangements, as the number of arrangements increases, the florist may need to hire additional staff or purchase more materials, which will increase the marginal cost.

However, at some point, adding more staff or materials may not increase productivity or efficiency, and the additional cost of each floral arrangement will begin to outweigh the additional revenue generated. This is why the marginal cost per floral arrangement increases as the number of arrangements increases, as the law of diminishing marginal returns comes into play.