If increasing quantities of a variable factor are applied to a given quantity of fixed factors, then the law of diminishing returns tells us that
A) total product will eventually begin to fall.
B) the marginal product will eventually decrease with constant average product.
C) the marginal product and the average product of the variable factor will eventually decrease.
D) the average product will eventually decrease, but only if total product is held constant.
E) the average product will eventually decrease with constant marginal product.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as additional units of a variable factor are added to a fixed factor, the marginal product of the variable factor will eventually decrease. As a result, the average product of the variable factor will also eventually decrease. Therefore, Choice C is the best answer.

If Increasing Quantities of a Variable Factor Are Applied to a Given