Question

The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the _________. a. less production is wasted. b. less is produced. c. the more an additional unit of capital adds to production. d. the less an additional unit of capital adds to production.

Answer 1

Answer:

b. Less is produced

Explanation:

The Principle of diminishing returns to capital states that as more unit of capital is  added, a point will be reached where a decline in the marginal product will be encountered.

This simply means that for every additional unit of capital invested in the business, a less than proportionate increase is seen, this simply means that there will be a decrease in marginal productivity.