Chapter 54, Problem 6MCQ

To determine

Diminishing returns

Explanation of Solution

Diminishing returns are a result of more of one input is added to a fixed quantity of another input because input is added to the fixed amount of capital.

Therefore, the correct option is a.

Economics Concept Introduction

Introduction:

Diminishing returns means with the increase in capital at a certain point the profit or return cannot continue to rise if variables remain constant.