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Lucero Alvarez
on Oct 27, 2024

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Diminishing returns to an input occur:

A) when all inputs are fixed.
B) when some inputs are fixed and some are variable.
C) when all inputs are variable.
D) only when there are no fixed inputs.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Fixed Inputs

Resources used in production that cannot be easily increased or decreased in the short term, such as buildings or machinery.

Variable Inputs

Resources or factors of production whose quantity can be changed in the short term to influence output.

  • Learn about the concept of diminishing returns and its repercussions on productivity efficiency.
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Sanjiv BassiOct 31, 2024
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