The law of diminishing marginal returns states that as the firm uses more of _______, with a given quantity of _______, the _______ product of the variable input eventually diminishes.
A) all inputs; capital; average
B) a variable input; fixed inputs; average
C) a fixed input; variable inputs; marginal
D) a variable input; fixed inputs; marginal

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns occurs when increasing one input, while keeping other inputs constant, leads to a decrease in the marginal output of the variable input. This is accurately described in option D, where a variable input is increased with fixed inputs, leading to a decrease in the marginal product of the variable input.

The Law of Diminishing Marginal Returns States That as the Firm