Which of the following best expresses the law of diminishing returns?
A. Because large-scale production allows the realization of economies of scale, the real costs
of production vary directly with the level of output.
B. Population growth automatically adjusts to that level at which the average product per
worker will be at a maximum.
C. As successive amounts of one resource (labor) are added to fixed amounts of other
resources (capital), beyond some point the resulting extra or marginal output will decline.
D. Proportionate increases in the inputs of all resources will result in a less-than-proportionate
increase in total output.
Answer: C
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