The law of diminishing marginal returns
A) holds even when there are no fixed factors.
B) applies only in the short run.
C) explains ultimately that production displays diseconomies of scale.
D) sets in because not all workers are equally productive.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns applies only in the short run because it assumes at least one input is fixed, which is typically the case in the short run. In the long run, all factors can be varied, so the concept doesn't apply in the same way.

The Law of Diminishing Marginal Returns