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Production Function: TP, MP and AP · Question 39 of 62

Question 39

MediumOriginal question

Why does marginal product eventually diminish when more labour is added to fixed capital?

Options for question 39

Show the answer and explanation
CorrectNot quiteAnswer D

Correct answer: D

Explanation

  1. The fixed input is shared among more and more workers.

  2. Once it is fully used, each extra worker adds less: the proportion between inputs has moved past its best.

Concept
Reason for diminishing returns
Typical time
70 s
Your time
—
The rule this testsThe law of variable proportions
Practise this chapter →

Ten questions from Production Function: TP, MP and AP, at your own pace.

Practise this chapter →

Ten questions from Production Function: TP, MP and AP, at your own pace.