The law of decreasing returns states that as a firm uses more of a
A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases.
B) variable input, total output will increase indefinitely.
C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.
D) variable input, output will begin to fall immediately.
E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.
C
You might also like to view...
Coupons represent a form of price discrimination because they offer a low-cost way for firms to
A) identify customers with apparently more elastic demand and offer them a lower price. B) retain loyal customers who are not price sensitive. C) offer discounts to consumers who buy larger quantities. D) perfectly price discriminate.
Costume jewelry is produced in a monopolistically competitive market. One producer produces 700 necklaces and at that output level, MR = MC = $3 . We know then that
a. the price is $3 b. economic profit is $2,100 c. the price is higher than $3 d. new firms will enter the market e. the firms should produce the 700 necklaces in the short run, but shut down in the long run