Which of the Following Best Explains the Decline in Marginal

question 154

Multiple Choice

Which of the following best explains the decline in marginal revenue product (MRP) ?

• A) As more and more of a variable factor (ex: Labor) is added to a fixed factor (ex: capital), total product become smaller and smaller.
• B) As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal product become smaller and smaller as defined by the law of diminishing returns.
• C) As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal utility becomes smaller and smaller.
• D) As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal revenue product (MRP) become larger and larger.

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