Marginal product decreases as labor increases because marginal cost is rising.

Question

Quizplus · Accepted Answer

Marginal product decreases as labor increases due to the law of diminishing returns, not because marginal cost is rising. The law of diminishing returns states that as more units of a variable input (like labor) are added to fixed inputs (like machinery or land), the additional output produced by each new unit of the variable input will eventually decrease.

Marginal Product Decreases as Labor Increases Because Marginal Cost Is