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JAMB Economics 1994 Question 6

Question 6

Theory of Production

The graph above represents a production function. At which of the points does diminishing returns set in?

Diagram for this question
  1. A.I
  2. B.J
  3. C.K
  4. D.L
Show the answer and explanation

Answer: B (J)

Explanation

Up to J the curve gets steeper (rising marginal product); after J it bends over, so each extra unit adds less: diminishing returns begin at J. K is where total output peaks.