-The firm depicted in Table 2.4 is likely to face diminishing returns because:
A) land is fixed but fertilizer is variable.
B) land and fertilizer are both fixed.
C) land and fertilizer are both variable.
D) the amount of fertilizer can only be increased to 5.

Question

-The firm depicted in Table 2.4 is likely to face diminishing returns because:
A) land is fixed but fertilizer is variable. 
B) land and fertilizer are both fixed. 
C) land and fertilizer are both variable. 
D) the amount of fertilizer can only be increased to 5.

Quizplus · Accepted Answer

Diminishing returns occur when one factor of production (land) is fixed and the other (fertilizer) is variable, leading to a decrease in the marginal output of the variable factor.

-The Firm Depicted in Table 2