The Concept of Diminishing Marginal Returns Implies That

question 17

Multiple Choice

The concept of diminishing marginal returns implies that

• A)output cannot decrease as long as labor is substituted for capital
• B)output decreases if either labor or capital is decreased
• C)output increases but at a decreasing rate as the amount of labor is increased and the amount of capital remains fixed
• D)if the capital stock is kept constant, output cannot increase even if more labor is available
• E)output increases but only if the amounts of both labor and capital increase

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