Answer to Question #200030 in Microeconomics for KINg

Question

What is the nature of the fixed factor that is causing the law of diminishing returns in Microsoft’s

case?

Answer 1

The law of diminishing returns applies in Microsoft’s case because certain factors of production are kept fixed. When certain factor becomes fixed, the adjustment of factor of production will be disturbed and the production will not increase at increasing rate and thus law of diminishing returns will apply.