Asked by cheyanne smith on Jul 22, 2024

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The law of diminishing returns results in:

A) an eventually rising marginal product curve.
B) a total product curve that eventually increases at a decreasing rate.
C) an eventually falling marginal cost curve.
D) a total product curve that rises indefinitely.

Law of Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, while holding all other inputs constant, crucial in understanding production efficiency.

  • Comprehend the concept of diminishing returns and its influence on production and cost implications.
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MG
Mansimran GirgalaJul 28, 2024
Final Answer :
B
Explanation :
The law of diminishing returns states that as additional units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. This results in a total product curve that eventually increases at a decreasing rate, indicating diminishing returns. Therefore, option B is the correct choice. Option A is incorrect as the marginal product curve will eventually decrease as a result of the law of diminishing returns. Option C is incorrect as the law of diminishing returns does not directly impact the marginal cost curve. Option D is incorrect as the total product curve will eventually flatten out due to diminishing returns.