If additional unit of a variable factor input causes a fall in the marginal product,...

Economics

JAMB 2016

If additional unit of a variable factor input causes a fall in the marginal product, this implies that

A. Total product starts declining
B. Average product has become zero
C. Diminishing returns has set in
D. Increasing returns is operating

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Correct Answer: Option C

Explanation

diminishing returns is the decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.

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If additional unit of a variable factor input causes a fall in the marginal product,...

Correct Answer: Option C

Explanation

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