Why Does the Law of Diminishing Return Not Apply in the Long

question 22

Multiple Choice

Why does the law of diminishing return not apply in the long run?

• A)All the factors of production are fixed
• B)There are no fixed factors of production
• C)There are some fixed and some variable factors
• D)The producer is required to produce a fixed level of output
• E)The producer can change the level of output only by changing the variable factors,fixed factors remaining unchanged

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Definitions:

Investment Centre

A business unit or segment which is responsible for its own revenues, expenses, and assets, and whose performance is measured by its return on investment.

Profit Centre

A profit centre is a distinct business unit or department within an organization that is responsible for generating its own revenue and managing its own costs to drive profitability.

Credit Sales

Sales made by a business where the amount is owed by the buyer for a period of time before payment is required.

Invoice Cost

The price for goods or services stated on an invoice, incorporating the cost of production or acquisition, but excluding additional expenses like shipping or taxes.