Which of the following is true if production displays increasing marginal returns?
A)total product rises by a constant amount throughout.
B)each new worker hired adds more to output than previous hires.
C)the firm must be adding new capital to keep boosting productivity.
D)total product reaches a maximum sooner than if production displayed decreasing returns.

Question

Quizplus · Accepted Answer

Increasing marginal returns means that each new worker hired is adding more to output than the previous hires. This results in a higher total product, but does not necessarily mean that it rises by a constant amount throughout or that new capital is required. It is also not necessarily true that total product reaches a maximum sooner than with decreasing returns.

Which of the Following Is True If Production Displays Increasing