The Law of Diminishing Returns Describes The

question 95

Multiple Choice

The law of diminishing returns describes the:

• A) relationship between total costs and total revenues.
• B) profit-maximizing position of a firm.
• C) relationship between resource inputs and product outputs in the short run.
• D) positive relationship between resource inputs and product outputs in the long run.

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Definitions:

Innovation

The process of translating an idea or invention into a good or service that creates value and for which customers will pay.

Oligopolists

Firms or entities that dominate an industry or market in an oligopoly, where a small number of companies have significant market power and influence over prices and output.

R&D

Research and development; activities undertaken by companies or governments to innovate and introduce new products or services.

Entry Barriers

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business, potentially including high startup costs, stringent regulations, or strong brand loyalty among consumers.