If the firm hires more labor,everything else held constant,then
A) the marginal product of labor falls.
B) output decreases.
C) there is an increase in the marginal product of labor.
D) total factor productivity falls.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as more and more units of a variable input (like labor) are added to a fixed amount of other inputs (like capital and technology), the marginal product of that variable input eventually decreases. Therefore, if a firm hires more labor while holding everything else constant, the marginal product of labor will fall.

If the Firm Hires More Labor,everything Else Held Constant,then