Which of the following is the best explanation of why the law of diminishing returns does not apply in the long run?
A)In the long run,firms can increase the availability of space and equipment to keep up with the increase in variable inputs.
B)The MPP does not change in the long run.
C)In the long run,firms have enough time to find the most qualified workers.
D)All factors of production are fixed in the long run.

Question

Quizplus · Accepted Answer

In the long run, firms have the ability to increase their fixed inputs such as space and equipment in order to keep up with the increasing variable inputs, which means that the law of diminishing returns does not apply.

Which of the Following Is the Best Explanation of Why