Although the law of diminishing returns is widely accepted in economics, it also ensures that the marginal revenue product must be positive.

Question

Quizplus · Accepted Answer

The law of diminishing returns suggests that adding more of one factor of production, while holding others constant, will at some point yield lower per-unit returns. It does not ensure that the marginal revenue product must be positive; the marginal revenue product can become negative if additional inputs reduce total output or revenue.

Although the Law of Diminishing Returns Is Widely Accepted in Economics