The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output. This is referred to as
A) the point of no return.
B) the law of diminishing returns.
C) supply and demand.
D) network inelasticity.

Question

Quizplus · Accepted Answer

The scenario described is an example of the law of diminishing returns. This law states that as more and more of a production factor is added to the production process, output will increase at a decreasing rate until a point is reached where the additional factor has no effect on output. This is also known as the point of diminishing marginal returns. None of the other options listed describe this phenomenon.

The More Any Given Resource Is Applied to Production, the Lower