Figure 12.1
-The movement from A to B to C in Figure 12.1 illustrates

Question

Figure 12.1 
-The movement from A to B to C in Figure 12.1 illustrates

Quizplus · Accepted Answer

The movement from A to B to C in Figure 12.1 illustrates diminishing returns to capital. Initially, as capital increases (from point A to point B), each additional unit of capital leads to an increase in output. However, as capital continues to increase (from point B to point C), the marginal product of capital starts to diminish, leading to diminishing returns to capital.

Figure 12.1 -The Movement from a to B to C in Figure