As soon as diminishing returns set in,a firm's
A)marginal product increases.
B)average fixed cost decreases.
C)marginal cost decreases.
D)marginal cost increases.
E)total cost decreases.

Question

Quizplus · Accepted Answer

Diminishing returns occur when the marginal product of labor decreases as more units of labor are added to the production process. This means that each additional unit of labor is becoming less productive and therefore the firm needs to spend more on labor to produce the same amount of output. As a result, the marginal cost of production increases.

As Soon as Diminishing Returns Set In,a Firm's