As successive equal increases in a variable factor of production are added to fixed factors of production, there will be a point beyond which the extra product that can be attributed to each additional unit of the variable factor of production will decline. This is known as the law of
A) diminishing total product.
B) diminishing average product.
C) diminishing marginal product.
D) decreasing product.

Question

Quizplus · Accepted Answer

The described situation is known as the law of diminishing marginal product, which states that as successive equal increases in a variable factor of production are added to fixed factors of production, there will be a point beyond which the extra product that can be attributed to each additional unit of the variable factor of production will decline. The other choices (diminishing total product, diminishing average product, and decreasing product) are not accurate descriptions of this law.

As Successive Equal Increases in a Variable Factor of Production