The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then
A) the AP will eventually decrease, but only if TP is held constant.
B) TP will eventually begin to fall.
C) the MP will eventually decrease with constant AP.
D) the MP and the AP of the variable factor will eventually decrease.
E) the AP will eventually decrease with constant MP.

Question

Quizplus · Accepted Answer

The law of diminishing returns implies that as more units of a variable factor are added to fixed factors, the marginal product (MP) of the variable factor will eventually decrease, and subsequently, the average product (AP) will also decrease.

The Law of Diminishing Returns States That If Increasing Quantities