If labor is the only variable input,an increase in the quantity of labor:
A)does not have any effect on the quantity of output.
B)causes the output to increase initially at a diminishing rate and then at an increasing rate.
C)causes the output to increase at a constant rate till the last worker is hired.
D)causes the output to increase initially at an increasing rate and then at a decreasing rate.
E)causes the output to decrease at a constant rate till the last laborer is hired.

Question

Quizplus · Accepted Answer

Initially, as more labor is added, the output increases at an increasing rate due to the division of labor and specialization. However, as the quantity of labor increases, the marginal product of additional labor decreases, causing the output to increase at a decreasing rate. This is known as the law of diminishing marginal returns.

If Labor Is the Only Variable Input,an Increase in the Quantity