Answer to Question #184825 in Microeconomics for Mbava

Question

7.1.2. Explain the concept of diminishing returns in short-run production. (2)

TP = (K̇,L)

where TP = Total production

K = Capital

L = Labour

Answer 1

The concept of diminishing returns in short-run production states that upon addition of more input variable units to the constant amounts of capital and land leads to the instant rising and then falling of the total output.