All factors of production usually experience:
A) decreasing average variable cost.
B) diminishing marginal productivity.
C) decreasing average fixed costs.
D) diminishing total productivity.

Question

Quizplus · Accepted Answer

Diminishing marginal productivity refers to the phenomenon where, as more and more units of a factor of production (such as labor or capital) are added to the production process, the incremental output produced by each additional unit of the factor starts to decrease. This is a common experience due to various reasons such as limited space, specialization or coordination problems, and it affects the overall productivity of the factors of production. A, C, and D are not accurate descriptions of the usual experience of the factors of production.

All Factors of Production Usually Experience