The law of diminishing returns to a variable input:
A)implies that total output must eventually decline.
B)implies that the MP of an input must rise initially.
C)implies that the MP of an input declines.
D)assumes that there are just two inputs.

Question

Quizplus · Accepted Answer

The law of diminishing returns to a variable input states that as we increase the quantity of one input while holding all other inputs constant, there will come a point where the marginal product (MP) of that input starts to decline. This means that each additional unit of the input will contribute less and less to overall output. Therefore, choice C is correct as it implies that the MP of an input declines.

The Law of Diminishing Returns to a Variable Input