The law of diminishing marginal returns means that when one uses more and more of an input:
Question
The law of diminishing marginal returns means that when one uses more and more of an input:
Solution
The law of diminishing marginal returns is an economic concept that describes a situation where, after a certain point, each additional unit of input results in less and less output. Here's how it works, step by step:
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Initially, increasing the amount of a single input (like labor or capital), while keeping other inputs constant, leads to an increase in output (or production).
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However, as you continue to increase that single input, there comes a point where each additional unit of input starts to produce less additional output than the previous unit did. This is the point of diminishing marginal returns.
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If you continue to add more of that input, there will eventually come a point where adding more input actually decreases the total output. This is known as negative returns.
In summary, the law of diminishing marginal returns states that, in a production process with at least one fixed input, there is a point at which each additional unit of variable input yields smaller and smaller increases in output.
Similar Questions
According to the law of diminishing marginal returnsMultiple Choicethe additional product generated by additional units of an input will eventually diminish.the additional inputs necessary to produce an additional unit of output will diminish.employing additional inputs will diminish total product.total product will fall and then rise as additional units of an input are employed.
Which of the following statements best expresses the law of diminishing marginal returns?Multiple ChoiceThe same percentage increase in all inputs will result in a higher percentage increase in total output.As successive amounts of one resource (labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline.Because large-scale production allows the realization of increasing returns to scale, the costs of production vary directly with the level of output.The same percentage increase in all inputs will result in a lower percentage increase in total output.Population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
Which of the following explains why the law of diminishing marginal returns occurs?APer-units costs for a firm increase as the firm builds successively larger plant sizes.BSuccessive units of a good yield lesser amounts of satisfaction to consumers.CAdditional variable resources crowd fixed resources.DWhen a firm reduces price to increase sales, additional revenue to the firm is less than the price.EWhen the price of a product is reduced, total revenue falls.
The law of diminishing marginal returns means that when one uses more and more of an input:Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aOutput will necessarily decrease.bOutput will eventually increase at a decreasing rate.cCosts will necessarily decrease.dCosts will eventually increase at a decreasing rate.
The law of diminishing marginal productivity states that, as more of a variable input is added to a fixed input, the:Question 5Answera.Marginal product of the variable input will eventually decrease.b.Total product will increase indefinitely.c.Average total cost will decrease.d.Fixed input will become variable.
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