The law of diminishing marginal returns
A)implies that the marginal product of labor must fall.
B)requires using superior technology to increase output.
C)means that total output will always fall.
D)None of the above.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as increasing amounts of a variable input (such as labor) are added to a fixed input (such as a factory or equipment), the marginal product of the variable input will eventually decrease. Therefore, A is the correct choice. B is incorrect because while superior technology may increase output, it is not a requirement for the law of diminishing returns to apply. C is also incorrect because while total output may eventually decrease as diminishing returns set in, it does not always fall.

The Law of Diminishing Marginal Returns