A firm will begin to experience diminishing returns at the point where
A) marginal cost increases.
B) marginal cost decreases.
C) marginal product increases.
D) Both B and C are correct.

Question

Quizplus · Accepted Answer

Diminishing returns occur when adding more of one factor of production (e.g., labor) leads to a decrease in the marginal product of that factor, which typically results in an increase in marginal cost.

A Firm Will Begin to Experience Diminishing Returns at the Point