_____ says that the marginal product of a factor input initially rises with its employment level. But after reaching a certain level of employment, it starts falling

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YESPYQ · Accepted Answer

Correct answer: b) Law of variable proportions. The law of variable proportions explains that when one factor of production is increased while others are held constant, the marginal product of that variable factor will initially increase. However, as more of the variable factor is employed, there comes a point where the marginal product begins to decline. This occurs due to factors such as limited space, equipment, or other fixed resources that can't be easily expanded. The law illustrates the idea that there's an optimal level of input usage beyond which efficiency decreases. This phenomenon is crucial for understanding production decisions and resource allocation in the short run. Hence, the correct answer is "Law of variable proportions."

_____ says that the marginal product of a factor input initially rises with its employment level. But after reaching a c…

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