The Law of Diminishing Marginal Returns Occurs Because

question 127

Multiple Choice

The law of diminishing marginal returns occurs because

• A) the marginal product of a variable input, such as labour, depends in part on the amount of fixed inputs, such as capital.
• B) the marginal product of an additional worker is greater than the marginal product of the previous worker.
• C) total production decreases as more of the variable inputs are used.
• D) adding more and more workers leads to a decrease in the quantity of capital.

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Definitions:

Profit Centers

Divisions or segments of a business responsible for generating revenue and managing its own costs, directly contributing to a company's profit.