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WAEC Economics 2012 Question 16

Question 16

Theory of Production

Why is the law of diminishing returns a short run phenomenon?

  1. A.All inputs are fixed
  2. B.All inputs are variable
  3. C.Some outputs are variable
  4. D.Some inputs are variable
Show the answer and explanation

Answer: D (Some inputs are variable)

Explanation

In the short run some inputs can be varied while others stay fixed; adding variable inputs to fixed ones causes diminishing returns.