Diminishing marginal returns occur when
A) one input is increasing and the others are held constant
B) all inputs increase
C) one input is decreasing while the other increases
D) output is decreasing

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when one input (such as labor) is increasing while the other inputs (like capital) are held constant. As more units of the variable input are added, the marginal product of that input will eventually start to decrease, leading to diminishing marginal returns.

Diminishing Marginal Returns Occur When