The principle of diminishing marginal productivity of labour implies that
A)output diminishes as labour increases.
B)output will decrease first,but it will increase as labour increases.
C)output increases at diminishing rate as labour increases.
D)output will increase first,but it will decrease as labour increases.

Question

Quizplus · Accepted Answer

The principle of diminishing marginal productivity of labour states that as units of labour are added to the production process while holding all other inputs constant, the resulting increase in output will eventually decrease. This is because each additional unit of labour is less productive than the one before it due to factors such as crowding, limited resources, and decreased coordination. Therefore, output increases, but at a decreasing rate as labour increases.

The Principle of Diminishing Marginal Productivity of Labour Implies That