Which situation is most likely to exhibit diminishing marginal returns to labor?

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when adding more units of a variable input (such as labor) leads to progressively smaller increases in output, given a fixed amount of other inputs (such as capital). Option B describes a situation in which the factory hires more workers but does not increase the amount of machinery, which could result in overcrowding and coordination problems that lower the productivity of each additional worker. In option A, the addition of new machines for every worker may lead to increasing marginal returns at first, but eventually the benefits of each additional machine may decrease as the workers' ability to use them efficiently reaches a limit. In option C, adding more machinery while keeping the number of workers constant would lead to an increase in productivity, as each worker would have more tools to work with. Therefore, option B is the most likely to exhibit diminishing marginal returns to labor.

Which Situation Is Most Likely to Exhibit Diminishing Marginal Returns