Question

The law of diminishing marginal returns states that as the amount of an input increases in...

The law of diminishing marginal returns states that as the amount of an input

increases in equal increments, the resulting increments in output

a.  
will decrease but eventually increase.

    b.  
will eventually be negative.

    c.  
will eventually get smaller.

    d.  
will eventually be constant.

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Answer #1

According to the law of diminishing returns when use of one inputs are increased, then additional output produced by the additional input decreases. Hence it means due to the law of diminishing marginal returns, the output will necessarily decreases. It means when MPL starts decreasing, the law of diminishing returns sets in.

Hence it can be said that the law of diminishing marginal returns states that as the amount of an input increases in equal increments, the resulting increments in output will decrease but eventually increase.

Hence option a is the correct answer.

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