The law of diminishing returns refers to diminishing:
A) total returns.
B) marginal returns.
C) average returns.
D) all of these.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more and more units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal product of the variable input will eventually begin to decrease. This means that the additional output gained from each additional unit of input will start to decline, resulting in diminishing marginal returns. It does not necessarily apply to total or average returns.

The Law of Diminishing Returns Refers to Diminishing