It is reasonable to expect that as the amount of physical capital is increased,the amount of output produced will
A) increase at a constant rate.
B) increase at a diminishing rate.
C) increase at an increasing rate.
D) decrease.
E) be unaffected.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as you increase one input (in this case physical capital) while holding all other inputs constant (labor, technology, etc.), the marginal output will eventually decrease. Therefore, as the amount of physical capital is increased, the amount of output produced will increase at a diminishing rate.

It Is Reasonable to Expect That as the Amount of Physical