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Adamari Arenas
on Dec 11, 2024

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Which of the following is an implication of the law of diminishing returns?

A) Total output will decline as more workers are hired.
B) In the long run, average total cost will eventually decline as output is expanded.
C) In the short run, expansion of output will eventually lead to increases in marginal cost and average total cost.
D) A doubling of all inputs will lead to more than a doubling of output.

Law of Diminishing Returns

The principle that as the level of investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Marginal Cost

The cost of producing one additional unit of a good or service.

Average Total Cost

The total cost of production divided by the quantity produced, indicating the cost effectiveness of producing goods.

  • Learn about the theory of diminishing returns and its significance for production operations.
  • Acquire insight into how cost behaviors contrast between the short run and long run in a corporate environment.
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Lashanna GoldmanDec 12, 2024
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