In the Short Run, Why Does a Production Function Eventually

question 38

Multiple Choice

In the short run, why does a production function eventually display diminishing returns to labor?

• A)As the number of workers increases, it becomes difficult to monitor them.
• B)As a firm hires more workers, the skills and the work ethic of the additional workers will eventually decline.
• C)As the number of workers increases, eventually the gains from the division of labor and specialization are used up.
• D)The opportunity cost of hiring additional workers must eventually rise.

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