Diminishing marginal product of labour occurs when adding another unit of labour:

Question

Quizplus · Accepted Answer

Diminishing marginal product of labour means that adding another unit of labour will result in an increase in output, but not at the same rate as the previous units of labour. This is because as more labour is added, there are diminishing returns to each additional unit, resulting in a decreasing marginal product of labour. Option B is incorrect as it suggests a decrease in output, which is not consistent with the concept of diminishing marginal product of labour. Option C is incorrect as it suggests an increasing marginal product of labour, which is not consistent with the definition. Option D is incorrect as there is a clear definition for the term.

Diminishing Marginal Product of Labour Occurs When Adding Another Unit