Holding the amount of capital constant, if firms increase the amount of labour they use, output increases at a diminishing rate, and this is the definition of:
A)diminishing marginal productivity of labour
B)diminishing marginal utility of labour
C)marginal revenue product of labour
D)marginal product of labour

Question

Quizplus · Accepted Answer

Diminishing marginal productivity of labour is the decrease in additional output as firms increase the amount of labour used while holding capital constant. Therefore, this option best fits the definition given in the question. The other options are not directly related to the concept of diminishing returns.

Holding the Amount of Capital Constant, If Firms Increase the Amount