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According to Diminishing Marginal Product, If All the Inputs to a Firm

Question 78

Multiple Choice

According to diminishing marginal product, if all the inputs to a firm are increased in equal proportions,

A) output will increase more than in proportion to the increase in the inputs.
B) output will increase less than in proportion to the increase in the inputs.
C) output will increase exactly in proportion to the increase in the inputs.
D) output will increase more than in proportion to the increase in the inputs at first, but it will eventually increase less than in proportion to the increase in the inputs.
E) The law of diminishing returns says nothing about what will happen to output when all inputs are increased in equal proportions.

Correct Answer: