The idea that when the amount of physical capital is fixed, an additional worker adds less to output than the previous worker is known as the:
A) marginal revenue product.
B) marginal physical product.
C) law of diminishing returns.
D) production function.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that if one factor of production (such as labor) is increased while other factors (like physical capital) are held constant, the incremental output or benefit from the additional input will eventually decrease. This concept explains why each additional worker contributes less to output when the amount of physical capital is fixed.

The Idea That When the Amount of Physical Capital Is