Question 50
Theory of ProductionThe law of diminishing returns enables an entrepreneur to know
- A.the limit to the amount of variable inputs the entrepreneur can employ
- B.that the input of capital can only be increased in the short run
- C.that the marginal productivity of labour increases only in the long run
- D.the type of market structure in which the entrepreneur can operate
Show the answer and explanation
Answer: A (the limit to the amount of variable inputs the entrepreneur can employ)
Explanation
It shows when adding more variable inputs stops paying.