Diminishing marginal returns means that aggregate production function is
A) linear
B) downward sloping
C) upward sloping
D) concave
E) convex

Question

Quizplus · Accepted Answer

Diminishing marginal returns occurs when additional units of inputs (such as labor or capital) lead to smaller and smaller increases in output. This results in a concave shaped aggregate production function, where the marginal product of inputs eventually decreases.

Diminishing Marginal Returns Means That Aggregate Production Function Is