If equal increments of one variable input are added while keeping the amounts of all other inputs fixed, and increasing additions to total product occur, then:
A) diminishing marginal returns have begun.
B) the output level where marginal product is maximized has not yet been reached.
C) average product has reached its maximum.
D) average product is at its minimum.
E) average product is declining.

Question

Quizplus · Accepted Answer

This scenario describes the law of diminishing marginal returns, which states that as additional units of a variable input are added while keeping all other inputs constant, the marginal product of that input will eventually decrease, leading to diminishing marginal returns. Therefore, option A is incorrect as it suggests that diminishing marginal returns have already begun. Option C is also incorrect as it implies that average product has already peaked, which is unlikely given that additional increments are still adding to the total product. Option D is incorrect as it suggests that average product is at its lowest, which is also unlikely given that additional increments are still adding to the total product. Lastly, option E is incorrect because average product is not necessarily declining - it may be increasing or staying constant. Therefore, option B is the best answer as it suggests that the output level where marginal product is maximized has not yet been reached, which is consistent with the scenario described.

If Equal Increments of One Variable Input Are Added While