What happens at a firm's point of saturation?
A) For the first time, hiring an additional worker decreases total product.
B) Workers cannot take on any additional tasks without working overtime hours.
C) The market for a firm's output has been saturated and sales fall to zero.
D) The firm's total costs exceed its revenues.

Question

Quizplus · Accepted Answer

At the point of saturation, adding an additional worker leads to a decrease in total product, indicating that the firm has already achieved maximum output with the current level of resources. This is known as the law of diminishing marginal returns, where additional resources lead to decreasing marginal returns.

What Happens at a Firm's Point of Saturation