Question

Diminishing marginal product suggests that the marginal A. cost of an extra worker is unchanged. B. cost of an extra worker is less than the previous workers marginal cost. C. product of an extra worker is greater than the previous worker's marginal product. D. product of an extra worker is less than the previous worker's marginal product.

Answer 1

Answer:

The correct answer is letter "D": product of an extra worker is less than the previous worker's marginal product.

Explanation:

The Law of Diminishing Marginal Productivity indicates that increasing one variable while holding others the same can initially increase output but eventually adding more of that variable results in lower return rates. This law helps explain that it is not always the best way to increase income by increasing production.

Initially, companies recruiting additional workers would boost production until too few machines or not enough space is sufficient to accommodate everyone. Then, the production rate will decrease.