The law of diminishing marginal returns states:
a) As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes.
b) As a firm uses more of a variable factor or production, total product eventually decreases.
c) As the size of a firm?s plant increases, average cost eventually decreases.
d) As the size of a plant increases, marginal product eventually decreases.
e) As a firm uses more of a variable factor of production, its average cost eventually decreases.
Ans: a) As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes.
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What will be an ideal response?