The law of diminishing returns
A)is completely invalid.
B)states that if units of a resource are added to a fixed proportion of other resources,eventually marginal output will decline.
C)states that if any two resources are combined,production will fall.
D)states that profit margins decline as output rises.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that if units of a resource are added to a fixed proportion of other resources, eventually marginal output will decline. This means that after a certain point, adding more of a resource will not increase output proportionally and may even decrease it. This law is widely accepted in economics and is an important factor in production decisions. Option A is incorrect as the law is a widely accepted economic principle. Option C is incorrect as it oversimplifies and misinterprets the law. Option D is incorrect as it refers to a different economic principle.

The Law of Diminishing Returns