Increasing marginal returns to labour might occur at low levels of labour input because of
A) increasing average costs.
B) decreasing use of machinery and increasing use of technology.
C) differing factor proportions.
D) increasing specialisation of tasks.

Question

Quizplus · Accepted Answer

Increasing marginal returns to labour at low levels of labour input often occur due to increasing specialisation of tasks. As more workers are added, each can specialize in a particular task, leading to more efficient production and thus increasing returns.

Increasing Marginal Returns to Labour Might Occur at Low Levels