Diminishing marginal product occurs when
A)the increases to total output are declining.
B)marginal product is negative.
C)total output is decreasing.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Diminishing marginal product occurs when the increases to total output are declining, which means that the additional output gained from using an additional unit of input is becoming smaller and smaller. This happens as a result of fixed inputs becoming more scarce relative to the variable inputs being used. It is important to note that although marginal product may decrease, total output may still be increasing.

Diminishing Marginal Product Occurs When