and Cheesemán-Business Law Gchapter 5 Flashcards Quidv ico m/L maspx?SemesterExa

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and Cheesemán-Business Law Gchapter 5 Flashcards Quidv ico m/L maspx?SemesterExamQuestionID=106181 Ashworth College Time A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding tals The principle of opportunity cost °The principle of diminishing returns The marginal principle O The spillover principle Submit answer and go to next question Copyright Ashworth College . All Rights Reserved 6625 The corners Parkway Suite 500, Norcross, Ceorgia 30092 bp

Explanation / Answer

As more of labor is added, output increases by less than proportionately. This means, marginal product of labor is decreasing, as per principle of diminishing returns.

So the correct option is. The principal of diminishing returns

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