The law of diminishing returns requires the assumption that
A) output is fixed.
B) factor proportions are fixed.
C) output increments are fixed.
D) returns are fixed.
E) at least one input must be fixed.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as one input factor is increasing while other factors are held constant, the marginal output will eventually decrease. This means that at least one input factor must be fixed for this law to hold true. Therefore, option E "at least one input must be fixed" is the best choice.

The Law of Diminishing Returns Requires the Assumption That