The law of diminishing returns occurs because
A) the marginal product of an additional worker is greater than the marginal product of the previous worker.
B) the marginal product of a variable input, such as labor, depends in part on the amount of fixed inputs, such as capital.
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 returns states that as more units of a variable input (like labor) are added to fixed inputs (like capital), the additional output from each new unit of input will eventually decrease. This is because the fixed inputs limit the productivity of additional variable inputs.

The Law of Diminishing Returns Occurs Because