The law of diminishing marginal returns explains why _____
A)monopolies have a guaranteed profit margin.
B)short-run marginal cost and average cost curves are U-shaped.
C)the production possibilities curve is bowed out.
D)long-run supply curves are downward sloping.
E)the total product curve is a straight line.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as additional units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. This results in U-shaped short-run marginal cost and average cost curves.

The Law of Diminishing Marginal Returns Explains Why _____