The principle that "as one input increases while the other inputs are held fixed, output increases at a decreasing rate" is known as the
A) marginal principle.
B) principle of opportunity cost.
C) principle of diminishing returns.
D) spillover principle.

Question

Quizplus · Accepted Answer

The principle of diminishing returns states that as one input increases while the other inputs are held fixed, output increases at a decreasing rate. This means that the additional output generated by each additional unit of input decreases as more units of that input are added. This principle is a fundamental concept in economics, particularly in the production function, and is often used to determine the optimal level of input for a given level of output.

The Principle That "As One Input Increases While the Other