The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output is referred to as:
A)the point of no return.
B)the law of diminishing returns.
C)supply and demand.
D)inelasticity.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more of a resource is applied to production, the marginal gain in output initially increases but eventually starts to decrease, eventually reaching a point where additional inputs produce no additional output. This concept is important in understanding how much of a resource to allocate to production in order to maximize output and minimize costs. The other options (A, C, D) do not accurately describe this concept.

The More Any Given Resource Is Applied to Production, the Lower