Let's say that a firm has a fixed number of machines, and a fixed space within which to work. As the firm hires workers to produce its output, it will observe that:

1. after a certain output, the additional output declines. However, there will always be increases as long as more workers are added.
2. after a certain output, the additional output increases. However, as more workers are added the additional output remains constant and the total output increases in proportionate increments.
3. there is a direct relationship between additional workers and additional output at all output levels. After a certain output, the additional output declines. As more workers are added, it is possible that the total output declines as well.
4. none of the above.

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Option 3 After a certain output the additional output ... View the full answer