Question

The law of diminishing returns a. explains why marginal cost eventually increases as output expands. b. implies that average fixed cost will remain unchanged as output expands. c. is true for physical production activities but not for activities such as studying. d. applies to a capitalist economy but would be irrelevant if the means of production were owned by the state.

Answer 1

Answer:

Option A    

Explanation:

In economies, decreasing yields is the decline in a development processor's average (incremental) productivity as the volume of one particular producing factor increases gradually, while the quantities of other development factors remain unchanged.

The law of decreasing yields notes that in all efficient systems, introducing greater than one output variable while keeping all the other stable will produce lower marginal per-unit yields at some stage.

The law of decreasing returns does not mean that introducing more than one variable will decline overall production, a condition called as poor returns, although this is normal in reality.