The chart shows the marginal cost of producing apple pies. A 3-column table titled The cost of pie production has 7 rows. The first column is labeled Pies produced per day with entries 0, 1, 2, 3, 4, 5, 6. The second column is labeled Total cost with entries 0, 1, 1.50, 1.75, 2.25, 3.50, 5. The third column is labeled Marginal cost with entries 0, 1, 0.50, 0.25, 0.50, 1.25, and 1.50.

This chart demonstrates that the marginal cost

initially decreases as production increases.
initially increases as production increases.
eventually decreases as production increases.
eventually increases as production decreases.