Diminishing Marginal Returns Occur When

question 276

Multiple Choice

Diminishing marginal returns occur when:

• A)each additional unit of a variable factor adds more to total output than the previous unit.
• B)each additional unit of a variable factor adds less to total output than the previous unit.
• C)the marginal product of a variable factor is increasing at a decreasing rate.
• D)total product decreases.

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Definitions:

Adjusting Entry

Accounting entries recorded at the close of an accounting cycle to distribute expenses and revenues to the period they truly belong to.

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Profit Margin Ratio

A measure of a company's profitability, represented by net income divided by revenue, indicating the percentage of each dollar of revenue that results in profit.

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