Diminishing marginal returns occur when
A) the average product of the variable input eventually diminishes.
B) the marginal product of an additional worker is less than the marginal product of the previous worker hired.
C) the firm hires cheap, less-skilled workers in place of expensive, high-skilled workers.
D) total product diminishes.

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when adding an additional unit of input results in a smaller increase in output than the previous unit, meaning the marginal product of the additional worker is less than that of the previous worker.

Diminishing Marginal Returns Occur When