The law of diminishing returns indicates that:
A. as extra units of a variable resource are added to a fixed resource, marginal product will
decline beyond some point.
B. because of economies and diseconomies of scale, a competitive firm's long-run average
total cost curve will be U-shaped.
C. the demand for goods produced by purely competitive industries is downsloping.
D. beyond some point, the extra utility derived from additional units of a product will yield the
consumer smaller and smaller extra amounts of satisfaction.
Answer: A
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