The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors,then
A)the MP and the AP of the variable factor will eventually decrease.
B)the MP will eventually decrease with constant AP.
C)the AP will eventually decrease with constant MP.
D)the AP will eventually decrease,but only if TP is held constant.
E)TP 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 (MP) of the variable input will eventually decline, meaning that each additional unit of input will produce fewer units of output. As a result, the average product (AP) of the variable input will also decline, since it is calculated as total output divided by the number of units of input. Therefore, choice A is the best answer. Choices B, C, D, and E are incorrect because they misstate the relationship between MP and AP, or do not accurately describe the outcome of the law of diminishing returns.

The Law of Diminishing Returns States That If Increasing Quantities