When an Additional Unit of a Variable Input Adds Less

question 333

Multiple Choice

When an additional unit of a variable input adds less to the total product than the previous unit,the firm has:

• A) increasing returns.
• B) diminishing marginal returns.
• C) diminishing total returns.
• D) diminishing marginal returns and diminishing total returns.

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Definitions:

Sealed-bid Auctions

Auctions in which all bidders simultaneously submit sealed bids to the auctioneer, with no bidder knowing the bid of any other participant.

Bid Rotation

A form of collusion in auction markets where participants take turns being the lowest bidder to ensure each wins a proportion of contracts over time.

Cartels

Organizations or associations of producers or suppliers formed to maintain prices at a high level and restrict competition.

Auctions

Competitive bidding processes where goods or services are sold to the highest bidder.