One reason that helps to explain the law of supply is the law of
A) diminishing marginal utility.
B) diminishing marginal returns.
C) decreasing opportunity costs.
D) demand.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as the quantity of a good produced increases, the marginal (additional) output resulting from each additional unit of input will eventually decrease. This means that producing an additional unit of a good will become more costly, leading to a higher supply price, and therefore a higher quantity supplied at all prices. Therefore, the law of supply follows the law of diminishing returns.

One Reason That Helps to Explain the Law of Supply