If production displays increasing marginal returns, then
A)total product rises by a constant amount throughout.
B)each new worker hired adds more to output than previous hires.
C)the firm must be adding new capital to keep boosting productivity.
D)total product reaches a maximum sooner than if production displayed decreasing returns.

Question

Quizplus · Accepted Answer

Increasing marginal returns means that each new worker hired adds more to output than previous hires. This leads to a faster increase in total product as more workers are hired.

If Production Displays Increasing Marginal Returns, Then