When diminishing marginal returns set in, total product
A)is negative
B)decreases at an increasing rate
C)decreases at a decreasing rate
D)increases at an increasing rate
E)increases at a decreasing rate

Question

Quizplus · Accepted Answer

Diminishing marginal returns mean that adding one more unit of input will lead to a smaller increase in output than the additional unit before it. As a result, the total product will continue to increase but at a decreasing rate, until it eventually reaches its maximum and starts to decline. Therefore, choice E - "increases at a decreasing rate" - is the best answer.

When Diminishing Marginal Returns Set In, Total Product