When diminishing marginal returns starts occurring, the addition of successive units of a variable resource to a fixed resource will cause the firm's production to diminish.

Question

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When diminishing marginal returns occur, the addition of successive units of a variable resource to a fixed resource causes the additional output (marginal product) from each new unit of the variable resource to decrease, not the firm's total production to diminish. Total production continues to increase but at a decreasing rate.

When Diminishing Marginal Returns Starts Occurring, the Addition of Successive