Figure 7-2 shows the total product curve for different levels of a variable input,labor.
Figure 7-2
-In Figure 7.3,the law of diminishing marginal returns comes into play beyond point _____.
A)A
B)B
C)C

Question

Figure 7-2 shows the total product curve for different levels of a variable input,labor.
Figure 7-2 
-In Figure 7.3,the law of diminishing marginal returns comes into play beyond point _____.
A)A 
B)B 
C)C

Quizplus · Accepted Answer

Beyond point B, the marginal product of labor starts to decrease, indicating diminishing returns. Therefore, it is not the best choice to increase the level of the variable input beyond point B. The optimal level of the variable input would be at point B, where the marginal product of labor is at its maximum and the total product curve is at its steepest point.

Figure 7-2 Shows the Total Product Curve for Different Levels