A downward-sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Question

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The law of diminishing marginal returns states that as additional units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal productivity of that variable input will eventually decrease. This is reflected in a downward-sloping marginal product of labor curve.

A Downward-Sloping Marginal Product of Labor Curve Demonstrates the Law