The property of diminishing marginal product means that, after a point, when additional quantities of:
A)a factor are added, output diminishes.
B)both labor and capital are added, output diminishes.
C)both labor and capital are added, the marginal product of labor diminishes.
D)a factor are added when another factor remains fixed, the marginal product of the first factor diminishes.

Question

Quizplus · Accepted Answer

The property of diminishing marginal product states that as more of a factor is added while holding another factor constant, the marginal product of the first factor will eventually decrease. Option A is incorrect because it doesn't specify which factor is being added. Option B is incorrect because it suggests that both labor and capital have a diminishing marginal product when added together, which is not necessarily true. Option C is incorrect because it only refers to the marginal product of labor, without considering the impact of capital.

The Property of Diminishing Marginal Product Means That, After a Point