-Refer to Figure 4.1, the increase in output from point B to C is greater than the increase in output from point C to D because

Question

Quizplus · Accepted Answer

The increase in output from point B to C being greater than from C to D can be attributed to the law of diminishing returns, which suggests that adding more workers to a fixed amount of capital (fixed inputs) eventually leads to a decrease in the marginal product of labor. This is because, after a certain point, each additional worker contributes less to output than the previous one, due to limitations in machinery, space, or management capacity.