Hiring an additional unit of a resource will always lead to some increase in output.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that after a certain point, adding an additional unit of a resource (like labor or capital) to a production process will result in a smaller increase in output compared to previous units added. This means there can be instances where adding more of a resource does not increase output at all, especially if other necessary resources are fixed and become over-utilized.

Hiring an Additional Unit of a Resource Will Always Lead