The ________ in output due to each additional unit of a factor of production is ________ when other factors are held constant.
A) increase; smaller
B) increase; larger
C) decrease; smaller
D) decrease; larger

Question

Quizplus · Accepted Answer

The concept described is the law of diminishing marginal returns, which states that as more units of a factor of production are added (while other factors are held constant), the additional output produced by each new unit will eventually decrease.

The ________ in Output Due to Each Additional Unit of a Factor