If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?
Correct answer: D. generate ever smaller amounts of output
- A. cause a reduction is output
- B. have no effect on output
- C. increase the marginal product of the factor
- D. generate ever smaller amounts of output
Explanation
Diminishing marginal product means each additional unit of an input adds less to total output than the previous unit. Thus, additional hiring generates progressively smaller amounts of additional output.
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