The law of diminishing marginal returns tells us that the more capital the firm uses,the

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Quizplus · Accepted Answer

The law of diminishing marginal returns states that as a firm uses more and more of a variable input (such as capital), while holding all other inputs constant, the marginal product of that variable input will eventually begin to decline. This means that the additional output produced by each additional unit of capital will be lower than the previous unit, and therefore the marginal revenue product (MRP) of the capital will decrease. Therefore, Choice C is correct in stating that the more capital the firm uses, the lower is the MRP of the firm's capital.

The Law of Diminishing Marginal Returns Tells Us That the More