As more output is produced, the marginal product of labor declines
A)because of the law of diminishing returns.
B)if firms reduce the wage paid to labor.
C)if the firm's output supply curve is inelastic.
D)because the firm's marginal revenue declines.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more of a variable input is added to a fixed input, the marginal product of the variable input will eventually decrease. In this case, as more labor is added to a fixed amount of capital, the marginal product of each additional unit of labor will eventually decline, leading to decreasing marginal returns.

As More Output Is Produced, the Marginal Product of Labor