Marginal product in the short run
A) increases at all levels of production.
B) diminishes at all levels of production.
C) may initially increase, then eventually decrease.
D) may initially decrease, then eventually increase.

Question

Quizplus · Accepted Answer

In the short run, as variable input (such as labor) increases, there will reach a point where the marginal product of that input will begin to decline. This is due to the fixed input (such as capital) not being able to keep up with the variable input, leading to diminishing returns. Therefore, the marginal product may initially increase as more labor is added, but eventually, it will start to decrease.

Marginal Product in the Short Run