If a price-taking firm is experiencing diminishing marginal returns to its variable factors of production,as the output price falls,it will

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If a price-taking firm is experiencing diminishing marginal returns to its variable factors of production, it means that as it produces more, the cost of producing additional units of output increases. This leads to lower profits or even losses as the output price falls. Therefore, the firm would produce less to avoid further losses.

If a Price-Taking Firm Is Experiencing Diminishing Marginal Returns to Its