Which of the following is correct?

Question

Quizplus · Accepted Answer

The Law of Diminishing Returns explains why, as more of a variable input is added to a fixed input, the marginal product of the variable input will eventually decrease. This is because the fixed input becomes increasingly scarce relative to the variable input, and so each additional unit of the variable input has less and less impact on output. This law underlies short-run cost behavior because, in the short run, some inputs are fixed and cannot be changed. As a result, as more of the variable input is used, the marginal cost of production will eventually increase.

Which of the Following Is Correct