The Principle of Diminishing Returns Occurs

question 50

Multiple Choice

The principle of diminishing returns occurs

• A) when there is only one input.
• B) when there are two or more inputs and at least one input is held fixed.
• C) when there are two or more inputs and all inputs are held fixed.
• D) when there are two or more inputs and all inputs are allowed to vary.

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Definitions:

Accounts Payable Turnover Ratio

A liquidity ratio that measures how many times a company pays off its suppliers over a period.

Accounts Payable

Money owed by a business to its suppliers or creditors for goods or services received.

Inventory

The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Interest-Bearing Note

A debt instrument that pays interest to the holder until the maturity date, at which point the principal is repaid.