The principle of diminishing marginal productivity implies that
A)if we increase labour and capital,the output will eventually decrease.
B)if we decrease labour and capital,the output will decrease.
C)if we increase one input while keeping other inputs constant,the productivity of variable input will decrease.
D)if we increase one input while keeping other inputs constant,the output will decrease.

Question

Quizplus · Accepted Answer

The principle of diminishing marginal productivity states that if we increase one input while keeping other inputs constant, the productivity of that variable input will eventually decrease. This is because the fixed inputs become a bottleneck for further increases in output. Eventually, increasing the variable input will lead to a point where the additional output gained is less than the additional input cost, leading to diminishing marginal productivity. Therefore, option C is correct. The other options are incorrect because they do not reflect the principle of diminishing marginal productivity.

The Principle of Diminishing Marginal Productivity Implies That