The law of diminishing returns states that, ceteris paribus, the
A) MPP of labor declines as additional land, raw materials, and other factors of production are employed.
B) MPP of labor declines as the wage rate falls.
C) MPP of labor declines as product price declines.
D) MPP of labor declines as more labor is employed.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more and more units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal product of the variable input will eventually decline. This means that each additional unit of labor will produce less and less output than the previous unit, leading to diminishing returns.

The Law of Diminishing Returns States That, Ceteris Paribus, the