As more units of capital are added, the marginal product of capital
A) increases.
B) decreases at first, then increases.
C) decreases.
D) remains constant.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as more units of a variable input, such as capital, are added to a fixed input, such as labor, the marginal product of the variable input will eventually decrease. Therefore, as more units of capital are added, the marginal product of capital will decrease.

As More Units of Capital Are Added, the Marginal Product