The version of the law of diminishing returns that applies to production
A) implies that as we add more workers our output decreases.
B) applies only in the short run.
C) is true only when all inputs are variable.
D) applies in the short and long run.

Question

Quizplus · Accepted Answer

The law of diminishing returns, in the context of production, applies only in the short run because it describes a situation where one input (e.g., labor) is increased while other inputs (e.g., capital, land) are held constant. In the long run, all inputs can be varied, so the concept specifically applies to the short run scenario.

The Version of the Law of Diminishing Returns That Applies