Table 2.4 -The Principle of Diminishing Returns Does NOT Apply to Labor

question 53

Multiple Choice

Table 2.4
-The principle of diminishing returns does NOT apply to labor when all inputs are allowed to vary because

• A) a firm can build an additional production facility so each worker's share of the facility doesn't necessarily decrease.
• B) eventually the marginal product of labor will begin to increase again.
• C) a firm can fire inefficient workers.
• D) None of the above. Diminishing returns always apply.

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