Diminishing marginal product of labour is said to exist when there is
A)an increase in the amount of capital available for each unit of labour.
B)a reduction in the level of labour input that causes output to increase.
C)an increase in the division and specialization of labour.
D)technological advancement.
E)a successively smaller increase in output with each successive unit increase in labour input.

Question

Quizplus · Accepted Answer

Diminishing marginal product of labour occurs when the input of one factor of production (labor) is increased while keeping all other factors of production constant, causing a successively smaller increase in output. Therefore, choice E is the best answer.

Diminishing Marginal Product of Labour Is Said to Exist When