Figure 13-3
-Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured)?
A)Output increases at a decreasing rate with additional units of input.
B)Output increases at an increasing rate with additional units of input.
C)Output decreases at a decreasing rate with additional units of input.
D)Output decreases at an increasing rate with additional units of input.

Question

Figure 13-3 
-Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured)?
A)Output increases at a decreasing rate with additional units of input. 
B)Output increases at an increasing rate with additional units of input. 
C)Output decreases at a decreasing rate with additional units of input. 
D)Output decreases at an increasing rate with additional units of input.

Quizplus · Accepted Answer

The statement suggests diminishing returns, where each additional unit of input results in a smaller increase in output, indicating output increases at a decreasing rate.

Figure 13-3 -Refer to Figure 13-3. Which of the Following Statements Best