What does the law of diminishing marginal return state?
A)That at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline.
B)That at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.
C)That in the presence of a fixed factor, at some point average product of labour starts to fall as more and more variable inputs are added.
D)That average total costs of production initially fall and after some point start to rise at a decreasing rate as output increases.

Question

Quizplus · Accepted Answer

The law of diminishing marginal return states that at some point, adding more of a variable input (such as labor) to a given amount of a fixed input (such as machinery) will cause the marginal product (output per unit of input) of the variable input to decline. This occurs because the fixed input becomes a constraint on the production process, limiting the potential output of the variable input.

What Does the Law of Diminishing Marginal Return State