The law of diminishing marginal returns is encountered as increasing amounts of labour are hired because:
A)as production rises, the additional labor hired is less and less skilled.
B)experienced workers are hired before the less skilled.
C)each extra worker hired decreases the amounts of land and capital per worker, so the work place becomes more congested and managerial control becomes more difficult.
D)as more and more is produced, selling it requires cutting prices.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns suggests that as more units of a variable input (like labor) are added to fixed inputs (like land and capital), the additional output from each new unit of input will eventually decrease. This is not because new workers are less skilled (A and B) or because of pricing strategies (D), but because adding more workers to a fixed amount of space and machinery leads to congestion and inefficiencies, making each additional worker less productive than the last.

The Law of Diminishing Marginal Returns Is Encountered as Increasing