Explain the concept of diminishing returns.
What will be an ideal response?
The principle of diminishing returns shows that in the short run, beyond some point, output will increase at a decreasing rate. For example, producing more output in an existing production facility by increasing the number of workers sharing the facility will bring into effect the principle of diminishing returns, as output will eventually increase but at a decreasing rate.
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An increase in the price level ________ the aggregate quantity supplied and ________ the aggregate quantity demanded
A) increases; decreases B) does not change; decreases C) decreases; increases D) decreases; decreases E) increases; increases
In recent years, the highest rate of unemployment among U.S. adults has been among
a. married men. b. adult females. c. adult males. d. black workers.
Laws that governments enact to regulate prices are called price barriers.
Select whether the statement is true or false. A. True B. False
If the firm produces at Q3, the firm:
A. will receive less profits that if it produces at Q2. B. maximizes profits. C. Minimizes costs. D. will receive less profits than if it produces at Q4.