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In economics, the law of diminishing returns refers to:
Question



In economics, the law of diminishing returns refers to:

A.

The absence of any relationship between input and output

B.

The constant output with each additional input

C.

The increase in output with each additional input

D.

The decrease in output with each additional input

Correct option is D


The correct answer is The decrease in output with each additional input.
The law of diminishing returns states that after a certain point, adding more of an input to a production process, while keeping other inputs constant, will lead to smaller increases in output. In other words, the marginal product of each additional input unit will decrease.

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