_________says that if we keep increasing the employment of an input, with other inputs fixed, eventually a point will be reached after which the resulting addition to output (i.e., the marginal product of that input) will start falling.

Question

YESPYQ · Accepted Answer

Correct answer: a) Law of diminishing marginal product. Law of diminishing marginal product says that while increasing one input and keeping other inputs at the same level may initially increase output, further increases in that input will have a limited effect, and eventually negative or no effect on the output. Law of variable proportions says that ‘ an increase in some inputs relative to other fixed inputs will in a given state of technology cause output resulting from same additions of extra inputs will become less. In the short-run scenario, any one of the factors which are associated with production is fixed. In the long run, factors associated with production as well as associated costs are variable in nature. Hence, the correct answer is “Law of diminishing marginal product”.

_________says that if we keep increasing the employment of an input, with other inputs fixed, eventually a point will be…

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