With all other inputs held fixed, the marginal product of any input must eventually increase as more of that input is hired.

Question

Quizplus · Accepted Answer

This statement is incorrect. The marginal product of any input eventually diminishes as more units of that input are used. This is due to the law of diminishing marginal returns, which states that as additional units of an input are added, the marginal product of that input will eventually start to decrease.

With All Other Inputs Held Fixed, the Marginal Product of Any