If the quantity of output rises as more of a variable input is added to a fixed input,
A)the law of diminishing marginal returns does not hold.
B)total fixed cost must be declining.
C)marginal cost must be constant.
D)marginal physical product of the variable input is necessarily rising.
E)marginal physical product of the variable input may be rising.

Question

Quizplus · Accepted Answer

If the quantity of output rises as more of a variable input is added to a fixed input, it indicates that the marginal physical product of the variable input may be rising. However, it does not necessarily mean that the law of diminishing marginal returns does not hold, total fixed cost is declining, or marginal cost is constant. These other factors are independent of the relationship between output and the variable input.

If the Quantity of Output Rises as More of a Variable