The principle of diminishing returns implies that when one input increases while the other inputs are held fixed, output: beyond some point will exhibit:
A) increases at a decreasing rate.
B) decreases at a decreasing rate.
C) decreases at an increasing rate.
D) increases at an increasing rate.

Question

Quizplus · Accepted Answer

The principle of diminishing returns states that as one input increases while other inputs are held fixed, the output will increase initially but then will start increasing at a decreasing rate. This means that beyond a certain point, further increases in input will result in less and less additional output. Therefore, option A is the correct choice.

The Principle of Diminishing Returns Implies That When One Input