Refer to the following:

Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit.
-Diminishing returns set in with the
A) 3rd unit of labor.
B) 6th unit of labor.
C) 10th unit of labor.
D) 12th unit of labor.
E) 14th unit of labor.

Question

Refer to the following:

Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit.
-Diminishing returns set in with the
A) 3rd unit of labor. 
B) 6th unit of labor. 
C) 10th unit of labor. 
D) 12th unit of labor. 
E) 14th unit of labor.

Quizplus · Accepted Answer

Diminishing returns occur when adding an additional factor of production results in a smaller increase in output. In this context, it is indicated that diminishing returns set in with the 6th unit of labor.

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