Diminishing returns occur because
A) not enough people have jobs.
B) one of the inputs to the production process is fixed.
C) consumers do not buy enough of the products produced.
D) people have not satisfied their self-interests.

Question

Quizplus · Accepted Answer

Diminishing returns occur when one of the inputs in the production process is fixed, meaning that it cannot be increased. As more and more of the variable input (e.g. labor) is added, there comes a point beyond which the additional output that is generated begins to decrease. This is because the fixed input (e.g. land) sets a limit on how much output can be produced, and adding more labor beyond a certain point results in less and less additional output per unit of labor.

Diminishing Returns Occur Because