The law of diminishing returns holds that total product eventually will begin to decline as the employment of some input increases.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more units of a variable input (like labor) are added to fixed inputs (like capital or land), the additional output produced by each new unit of the variable input will eventually decrease, not that the total product will begin to decline. Total product may continue to increase, but at a decreasing rate.

The Law of Diminishing Returns Holds That Total Product Eventually