If each additional worker hired contributes less to total output, then:

Question

Quizplus · Accepted Answer

Diminishing returns occur when each additional unit of input leads to a smaller increase in output. This means that if each additional worker hired contributes less and less to total output, then diminishing returns are occurring. Option A, economies of scale, refers to the benefits of increasing production in the long run, and is not relevant to the scenario. Option B is not necessarily true, as total output could still increase with an extra worker, just at a decreasing rate. Option D is incorrect because we have established that diminishing returns are occurring.

If Each Additional Worker Hired Contributes Less to Total Output