Asked by
Claire Combs
on Dec 19, 2024
Verified
The law of diminishing returns indicates that
A) as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point.
B) because of economies and diseconomies of scale, a competitive firm's long-run average total cost curve will be U-shaped.
C) the demand for goods produced by purely competitive industries is downsloping.
D) beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.
Marginal Product
The incremental increase in output resulting from the use of one additional unit of a resource, while keeping other resources constant.
Variable Resource
A factor of production whose quantity can easily be changed in the short term to increase or decrease production levels.
Fixed Resource
An asset or resource in production that cannot be easily increased or decreased in the short term, such as land or machinery.
- Familiarize oneself with the concept and subsequent impacts of diminishing marginal returns in terms of production.
Verified Answer
FS
Learning Objectives
- Familiarize oneself with the concept and subsequent impacts of diminishing marginal returns in terms of production.