The larger the output,the more variable input required to produce additional units.Called the _____ effect,this leads to a _____ average _____ cost as the output rises.
A) spreading;lower;fixed
B) spreading;higher;fixed
C) diminishing returns;lower;variable
D) diminishing returns;higher;variable

Question

Quizplus · Accepted Answer

The statement describes the concept of diminishing returns, where as output increases, additional input is required but the resulting increase in output becomes smaller. This leads to higher average variable costs as output rises. Therefore, the correct choice is D, where the statement includes both the concept and the resulting effect.

The Larger the Output,the More Variable Input Required to Produce