Asked by
Annette Bailey
on Oct 08, 2024
Verified
The law of diminishing returns indicates that:
A) as extra units of a variable resource are added to a fixed resource,marginal product will decline beyond some point.
B) because of economies and diseconomies of scale,a competitive firm's long-run average total cost curve will be U-shaped.
C) the demand for goods produced by purely competitive industries is downsloping.
D) beyond some point,the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.
Law of Diminishing Returns
An economic 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 variables remain at a constant.
Marginal Product
The additional output that is produced by employing one more unit of a particular input, keeping all other inputs constant.
Variable Resource
An input in production that can be adjusted in the short term to change the level of output.
- Grasp the law of diminishing returns and its implications for production.
Verified Answer
RW
Learning Objectives
- Grasp the law of diminishing returns and its implications for production.