The per-worker production function flattens out due to ________.
A)the negative relationship between price and quantity demanded
B)the positive relationship between price and quantity demanded
C)the diminishing marginal product of capital
D)an increase in the general level of prices

Question

Quizplus · Accepted Answer

The per-worker production function flattens out due to the diminishing marginal product of capital. As more capital is added to the production process, the additional output generated by each additional unit of capital gradually decreases. This is known as the law of diminishing marginal returns. Eventually, the point is reached where adding more capital no longer results in significant increases in output per worker, and the per-worker production function flattens out.

The Per-Worker Production Function Flattens Out Due to ________