The law of diminishing marginal returns _____.
A)is relevant in the short run.
B)assumes all the inputs are fixed
C)is applicable to fixed and variable inputs
D)applies when all inputs are increased

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns is relevant in the short run. This law states that as more and more units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal product (additional output produced by each additional unit of the variable input) will eventually decrease. This typically occurs due to decreasing efficiency as more units of the variable input are added.

The Law of Diminishing Marginal Returns _____