Asked by Mallory Connell on Jun 10, 2024
Verified
Which of the following statements describes the presence of diminishing returns? All else equal,
A) Marginal product is constant as output increases
B) Marginal product is falling as output increases
C) Marginal product is rising as output increases
D) Marginal product is zero
Marginal Product
The additional output that is produced by adding one more unit of a specific input, while holding all other inputs constant.
Diminishing Returns
The decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while other factors are kept constant.
- Understand the concept of diminishing returns and its effect on marginal and average product.
Verified Answer
DK
Danyil KovalenkoJun 14, 2024
Final Answer :
B
Explanation :
Diminishing returns occur when the marginal product of an input decreases as the quantity of the input increases, eventually reaching a point where adding additional inputs leads to a decrease in output. This is reflected in choice B, where marginal product is falling as output increases.
Learning Objectives
- Understand the concept of diminishing returns and its effect on marginal and average product.
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