At that amount of output where diminishing marginal returns first sets in,
A)average product begins to decrease.
B)total product begins to decrease.
C)marginal cost begins to decrease.
D)marginal product begins to decrease.
E)average product is at its maximum.

Question

Quizplus · Accepted Answer

Diminishing marginal returns refers to the point at which adding an additional unit of input (such as labor or capital) results in a smaller increase in output. This means that marginal product, the additional output produced by one additional unit of input, begins to decrease. Therefore, choice D is the best answer. Average product, total product, and marginal cost may also be affected by diminishing marginal returns, but they are not the first to be impacted. Additionally, it is not necessarily true that average product is at its maximum at this point.

At That Amount of Output Where Diminishing Marginal Returns First