Question

In the short run the law of diminishing returns

Answer 1

The law of diminishing returns refers to the short run production function - where there is at least one fixed factor input.

In the short run, the law of diminishing returns states that as we add more units of a variable input to fixed amounts of land and capital, the change in total output will at first rise and then fall.

Diminishing returns to labour occurs when marginal product of labour starts to fall. This means that total output will be increasing at a decreasing rate.