Diminishing returns to capital implies that _____ diminishes as more capital is added.

Question

Quizplus · Accepted Answer

Diminishing returns to capital is the economic concept that as more capital (such as machinery, equipment, or buildings) is added to a production process, the marginal product of capital (the additional output produced by each additional unit of capital) eventually decreases. This means that the output may continue to increase, but at a decreasing rate. Therefore, choice B is the best answer as it directly pertains to the concept of diminishing returns to capital.

Diminishing Returns to Capital Implies That _____ Diminishes as More