Diminishing marginal returns lead to diminishing returns A. only in theory. B. when marginal returns become negative. C. when labor exceeds capital. D. when marginal returns fall but remain positive.

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Social Studies

Blake

2 October, 00:18

Diminishing marginal returns lead to diminishing returns A. only in theory. B. when marginal returns become negative. C. when labor exceeds capital. D. when marginal returns fall but remain positive.

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Elsa Simpson · Answer 1

Diminishing marginal returns lead to diminishing returns when marginal returns fall but remain positive.

Option: D

Explanation:

The theory of diminishing marginal returns says that inclusion or addition extra materials from outside do not affect much the present production rate that means production will change but not in huge quantity. That's why it implies that marginal return fall but remain positive.

It indicates that change in one single factor can't change the rate whole output. It indicates that change in one single factor can't change the rate whole output. Rate of increase 5% to 10% not more than that. It is also called diminishing marginal productivity.