Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Total output will continue to increase indefinitely with added input
B
Marginal product will eventually decrease as more of a variable input is added to a fixed input
C
All inputs must be increased to maintain output levels
D
Inputs have no effect on output after a certain point
Understanding the Answer
Let's break down why this is correct
Answer
The Law of Diminishing Returns explains that when you keep adding more of one input in production, like labor or fertilizer, while keeping other inputs constant, the extra output you get from each additional unit will eventually start to decrease. For example, if a farmer adds more workers to a field but doesn’t increase the size of the field, each new worker will contribute less to the overall harvest than the previous one. Initially, adding workers might greatly increase the crop yield, but after a certain point, those new workers will crowd each other and not be able to work as efficiently. This means that while you can still get some benefit from adding more input, the added benefit will be less and less over time. Understanding this law helps businesses and farmers make better decisions about how much input to use for maximum efficiency.
Detailed Explanation
The Law of Diminishing Returns says that as you add more of one input, like workers, to a fixed amount of another input, like machines, the extra output you get from each new worker will start to decrease. Other options are incorrect because This option suggests that adding more input will always increase output without limits; This option implies that you must increase all inputs to keep output steady.
Key Concepts
Law of Diminishing Returns
Topic
Marginal Product Analysis
Difficulty
easy level question
Cognitive Level
understand
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