The law of diminishing marginal returns occurs because
A) the marginal product of a variable input, such as labour, depends in part on the amount of fixed inputs, such as capital.
B) the marginal product of an additional worker is greater than the marginal product of the previous worker.
C) total production decreases as more of the variable inputs are used.
D) adding more and more workers leads to a decrease in the quantity of capital.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as more of a variable input (like labor) is added to a fixed amount of another input (like capital), the additional output produced from each new unit of the variable input will eventually decrease. This happens because the fixed inputs cannot be increased to match the increase in the variable input, leading to less efficient production.

The Law of Diminishing Marginal Returns Occurs Because