The law of diminishing returns results in
A)an eventually rising marginal product curve.
B)a total product curve that eventually increases at a decreasing rate.
C)an eventually falling marginal cost curve.
D)a total product curve that rises indefinitely.

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 produced by each new unit of the variable input will eventually decrease. This is reflected in a total product curve that initially increases at an increasing rate due to improvements in efficiency, but eventually increases at a decreasing rate as the efficiency gains are outweighed by the overcrowding of the fixed inputs or the inefficiencies of coordination.

The Law of Diminishing Returns Results in