The Law of Diminishing Returns States That as

question 461

Multiple Choice

The law of diminishing returns states that as

• A) the size of a plant increases, the firm's fixed cost decreases.
• B) the size of a plant increases, the firm's fixed cost increases.
• C) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes.
• D) a firm uses more of a variable input, given the quantity of fixed inputs, the firm's average total cost will decrease eventually.