Use the following production function to answer the next questions.

-This production function exhibits
A) diminishing marginal product.
B) constant marginal product.
C) increasing marginal product.
D) increasing returns to capital.
E) a constant rate of depreciation.

Question

Use the following production function to answer the next questions.
 
-This production function exhibits
A) diminishing marginal product. 
B) constant marginal product. 
C) increasing marginal product. 
D) increasing returns to capital. 
E) a constant rate of depreciation.

Quizplus · Accepted Answer

The production function exhibits diminishing marginal product because as more units of either capital or labor are added while holding the other factor constant, the marginal product of that factor will eventually decrease. This is indicated by the curved shape of the production function.

Use the Following Production Function to Answer the Next Questions