According to the law of declining marginal productivity, when a fixed element is present, the average product of labour eventually starts to decrease as more and more variable inputs are introduced.
The phenomenon known as diminishing marginal utility describes how each extra unit of gain results in an ever-smaller rise in subjective value.
An economic principle known as the law of diminishing returns states that as investment in a certain area increases, the rate of profit from that investment can no longer increase at a certain point assuming other variables remain constant.
As an illustration, consider a factory that, for a given increase in input, increases both its producible product and its CO2 output. A cornerstone of both micro and macroeconomics, the law of decreasing returns also occupies a significant place in production theory.
As more and more variable inputs are added, the average product of labour eventually starts to decline in the presence of a stable factor, according to the law of declining marginal productivity.
The complete question is:
The Law of diminishing marginal returns states
a) that at some point, adding more of variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.
b) the at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline.
c) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases
d) that is the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added
Therefore, the correct answer is option A) that at some point, adding more of variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.
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