Assume that the only variable resource used to produce output is labor. Refer to the provided table. Diminishing marginal returns set in with the addition of the

Question

Assume that the only variable resource used to produce output is labor.  Refer to the provided table. Diminishing marginal returns set in with the addition of the

Quizplus · Accepted Answer

Diminishing marginal returns occur when each additional unit of labor results in diminishing increases in output. In this table, we see that after the third unit of labor, the marginal product of labor (output per unit of labor) begins to decrease. Therefore, the best choice is C, which is when diminishing marginal returns start to set in.

Assume That the Only Variable Resource Used to Produce Output