Diminishing returns occurs because:
A) people have not satisfied their self- interests.
B) consumers do not buy enough of the products produced.
C) not enough people have jobs.
D) one of the inputs to the production process is fixed.

Question

Quizplus · Accepted Answer

Diminishing returns occur when one input to the production process is fixed because as additional units of a variable input are added, the marginal product of that input eventually decreases. This leads to a point where additional units of the variable input will not result in a significant increase in output because the fixed input is already at its maximum level of productivity.

Diminishing Returns Occurs Because