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
jamb 2016economics

The correct answer is C. Diminishing returns has set in

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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