If the _______ of labor is increased, ceteris paribus, eventually the _______ will ________.
A) price; supply of labor; increase
B) quantity; marginal product of labor; fall
C) quantity; marginal product of labor; rise
D) quantity; marginal revenue product of labor, rise

Question

Quizplus · Accepted Answer

When the quantity of labor increases, holding other factors constant (ceteris paribus), the marginal product of labor (the additional output produced by an additional unit of labor) tends to fall due to the law of diminishing returns. This principle states that as more units of a variable input (like labor) are added to fixed amounts of other inputs, the additional output from each new unit of input will eventually decrease.

If the _______ of Labor Is Increased, Ceteris Paribus, Eventually