The Law of Diminishing Marginal Returns States

question 88

Multiple Choice

The law of diminishing marginal returns states:

• A)As the size of a plant increases,marginal product eventually decreases.
• B)As the size of a firm's plant increases,average cost eventually decreases.
• C)As a firm uses more of a variable factor of production,with a given quantity of the fixed factor of production,the marginal product of the variable factor eventually diminishes.
• D)As a firm uses more of a variable factor of production,its average cost eventually decreases.
• E)As a firm uses more of a variable factor or production,total product eventually decreases.

---

Definitions:

Mutual Mistake

An error made by both parties in a contract that can render the agreement void.

Negligent Misrepresentation

A false statement of material fact made by a person who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.

Reasonable Care

The degree of caution and concern an ordinarily prudent and rational person would use in similar circumstances, typically used in legal contexts.

Voidable Contract

An agreement that may be annulled or declared void by one of the parties due to certain legal deficiencies or circumstances.