If an additional employee adds more output than the previous employee hired, a company is experiencing

Question

Quizplus · Accepted Answer

Increasing marginal returns occur when each additional unit of input (in this case, an employee) adds more to the output than the previous unit did. This is typically observed in the short run where there are fixed factors of production, and adding more of a variable factor (like labor) can lead to more efficient use of those fixed factors, at least up to a point.

If an Additional Employee Adds More Output Than the Previous