If increasing quantities of a variable factor are applied to a given quantity of fixed factors,then the law of diminishing returns tells us that
A)the marginal product and the average product of the variable factor will eventually decrease.
B)the marginal product will eventually decrease with constant average product.
C)the average product will eventually decrease with constant marginal product.
D)the average product will eventually decrease,but only if total product is held constant.
E)total product will eventually begin to fall.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more units of a variable input are added to a fixed input, the marginal product (additional output produced by each additional unit of the variable input) will eventually decrease. This means that the average product (total output divided by total input) will also eventually decrease, since marginal product is a component of average product. Therefore, choice A is the correct one.

If Increasing Quantities of a Variable Factor Are Applied to a Given