Whenever the marginal product of a firm's only variable input was positive,but falling:
A) its total product is growing at a decreasing rate.
B) it will use more of the variable input until its marginal product is negative.
C) it would reduce its use of the variable input.
D) its total product is beyond its maximum.

Question

Quizplus · Accepted Answer

When the marginal product of a firm's only variable input is positive but falling, it means that the additional output produced by each additional unit of input is decreasing. This implies that the firm is experiencing diminishing marginal returns. As a result, the total product is still growing, but at a decreasing rate. Therefore, choice A is the correct answer.

Whenever the Marginal Product of a Firm's Only Variable Input