The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors,then
A)the MP and the AP of the variable factor will eventually decrease.
B)the AP will eventually decrease with constant MP.
C)the MP will eventually decrease with constant AP.
D)the AP will eventually decrease,but only if TP is held constant.
E)TP will eventually begin to fall.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more and more units of a variable input (such as labor) are added to a fixed input (such as a factory), holding all other inputs constant, the marginal product of the variable input will eventually decrease. This means that each additional unit of the variable input will lead to a smaller increase in output than the previous unit, eventually leading to a decrease in the average product of the variable input as well. Therefore, choice A is the best answer.

The Law of Diminishing Returns States That If Increasing Quantities