Diminishing marginal returns occur when:
A)each additional unit of a variable factor adds more to total output than the previous unit.
B)each additional unit of a variable factor adds less to total output than the previous unit.
C)the marginal product of a variable factor is increasing at a decreasing rate.
D)total product decreases.

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when each additional unit of a variable factor adds less to total output than the previous unit. This means that the marginal product of the variable factor is decreasing, resulting in diminishing returns.

Diminishing Marginal Returns Occur When