The property of diminishing marginal product means that, after a point, when additional quantities of:
A) a factor are added, output diminishes.
B) both labor and capital are added, output diminishes.
C) both labor and capital are added, the marginal product of labor diminishes.
D) a factor is added when another factor remains fixed, the marginal product of that factor diminishes.

Question

Quizplus · Accepted Answer

The concept of diminishing marginal product refers to the decrease in the additional output produced by an additional unit of a factor of production (such as labor or capital), when all other factors are held constant. This principle is a key concept in economics, particularly in the theory of production, indicating that as more of one input is added, holding all other inputs constant, the additional output generated from each new unit of input will eventually decrease.

The Property of Diminishing Marginal Product Means That, After a Point