Increasing marginal returns occur when the total product function is:
A)decreasing.
B)increasing at a decreasing rate.
C)increasing at a constant rate.
D)Increasing at an increasing rate.

Question

Quizplus · Accepted Answer

Increasing marginal returns occur when the slope of the total product function is increasing, which means the function is increasing at an increasing rate. Therefore, the correct answer is D. Increasing marginal returns occur when the total product function is increasing at an increasing rate. This means that as more units of input are added, the output increases at an increasing rate, resulting in greater marginal product for each additional unit of input. This is the stage where the production process is most efficient and cost-effective.

Increasing Marginal Returns Occur When the Total Product Function Is