The law of diminishing returns shows that, in the short run, _____.

Question

Quizplus · Accepted Answer

The law of diminishing returns indicates that as more units of a variable input (like labor) are added to fixed inputs (like machinery), the additional output (marginal product) from each new unit of input eventually decreases. This decrease in marginal product leads to an increase in the cost of producing each additional unit, hence variable costs rise as the marginal product of labor falls.

The Law of Diminishing Returns Shows That, in the Short