Marginal product:
A)diminishes at all levels of production
B)may initially increase, then diminishes, but never becomes negative
C)may initially increase, then diminishes, and ultimately becomes negative
D)is always less than average product
E)is always greater than average product

Question

Quizplus · Accepted Answer

Marginal product may initially increase due to efficiencies gained from specialization and division of labor. However, as production continues to increase, it typically diminishes due to the law of diminishing returns. Eventually, it can become negative when additional inputs actually decrease total output.

Marginal Product