Answer to Question #220791 in Microeconomics for Ujjwal

Question

Diminishing marginal returns occurs when

Select one:

a. when the opportunity cost the extra output increases

b. when the opportunity cost the extra output decreases

c. output remains constant as more of variable factor is added to a fixed factor, output initially increases, then peaks before finally declining

d. output declines as more of variable factor is added to a fixed factor, output initially increases, then peaks before finally declining

Answer 1

Diminishing marginal returns occur when

d. Output declines as more of variable factor is added to a fixed factor , output initially increases, then peaks before finally declining.