Diminishing marginal product of labour occurs when adding another unit of labour
A)decreases output.
B)changes output by an amount smaller than the output added by the previous unit of labour.
C)increases output by an amount larger than the output added by the previous unit of labour.
D)decreases output by an amount smaller than the output added by the previous unit of labour.

Question

Quizplus · Accepted Answer

Diminishing marginal product of labour means that the additional unit of labour added to the production process increases output, but by a smaller amount than the previous unit of labour. Therefore, option B, "changes output by an amount smaller than the output added by the previous unit of labour," is the correct choice.

Diminishing Marginal Product of Labour Occurs When Adding Another Unit