If the first worker produces five custom picture frames a day, and the second worker produces five additional custom picture frames a day, it is clear that diminishing marginal returns have not yet set in.

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when adding an additional factor of production results in a smaller increase in output. In this case, both workers are producing at the same rate without a decrease in productivity, indicating diminishing marginal returns have not set in.

If the First Worker Produces Five Custom Picture Frames a Day