Exhibit 6-1 Production of pizza data
Workers
Pizzas
0
  0
1
  4
2
10
3
15
4
18
5
19
Exhibit 6-1 shows the change in the short-run production of pizzas as more workers are hired. The table shows the marginal product of the labor input is decreasing with the hiring of the third worker. A possible reason for this diminishing marginal product is:

Studies suggest that brand loyalty is based primarily on real differences among competing products, suggesting that persuasive advertising is an ineffective means to maintain or increase market share

Indicate whether the statement is true or false

Refer to the above figure. An excise tax of $0.50 was imposed on this good. From the figure we can see that the

A) producer will bear most of the tax. B) consumer will bear most of the tax. C) consumer and producer will share the tax. D) amount of the tax collected is less than $0.50.