As the quantity of capital increases, the marginal product of capital
A)is constant.
B)increases.
C)decreases.
D)may either increase or decrease.
E)gets more expensive.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as the quantity of a variable input (in this case, capital) increases, holding other factors constant, the marginal product of that input will eventually decrease. Therefore, as the quantity of capital increases, the marginal product of capital will decrease.

As the Quantity of Capital Increases, the Marginal Product of Capital