The law of diminishing marginal returns states:
A)As the size of a plant increases,marginal product eventually decreases.
B)As the size of a firm's plant increases,average cost eventually decreases.
C)As a firm uses more of a variable factor of production,with a given quantity of the fixed factor of production,the marginal product of the variable factor eventually diminishes.
D)As a firm uses more of a variable factor of production,its average cost eventually decreases.
E)As a firm uses more of a variable factor or production,total product eventually decreases.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes. This means that the incremental output gained from each additional unit of input would become smaller and smaller, eventually leading to a point where increasing the variable factor would result in a decrease in total output.

The Law of Diminishing Marginal Returns States