The law of diminishing marginal returns explains why a marginal revenue product schedule
A) first declines and then increases.
B) is always negative.
C) eventually increases.
D) eventually declines.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as more units of a variable input (like labor) are added to fixed inputs (like capital), the additional output produced by each new unit of the variable input will eventually decrease. This principle leads to a decline in the marginal revenue product over time, as each additional unit of input contributes less to total revenue.

The Law of Diminishing Marginal Returns Explains Why a Marginal