When diminishing marginal returns set in, marginal product is
A)positive and increasing
B)positive and decreasing
C)negative and increasing
D)negative and decreasing
E)zero

Question

Quizplus · Accepted Answer

Diminishing marginal returns mean that as more and more of a variable input (such as labor) is added to a fixed input (such as capital), the marginal product of that variable input will eventually begin to decrease. This means that the additional output produced by each additional unit of the variable input becomes smaller and smaller, indicating a positive but decreasing marginal product. Therefore, the best choice is B, positive and decreasing.

When Diminishing Marginal Returns Set In, Marginal Product Is