Commerce Exam > Commerce Questions > The law of diminishing (marginal) returns sta...
Start Learning for Free
The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:
- a)Total physical product begins to fall
- b)The marginal physical product rises
- c)The marginal physical product falls
- d)The average physical product falls
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
The law of diminishing (marginal) returns states that as more of a var...
The law of diminishing marginal returns states that, at some point, adding an additional factor of production results in smaller increases in output. With other production factors constant, adding additional workers beyond this optimal level will result in less efficient operations.
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
The law of diminishing (marginal) returns states that as more of a var...
The law of diminishing marginal returns states that, at some point, adding an additional factor of production results in smaller increases in output. ... With other production factors constant, adding additional workers beyond this optimal level will result in less efficient operations.
Community Answer
The law of diminishing (marginal) returns states that as more of a var...
Law of Diminishing Marginal Returns:
The Law of diminishing marginal returns is a theory in economics that explains how the marginal output of a production process decreases as the amount of a single factor of production is increased while holding the amounts of all other factors of production constant.
Explanation:
The Law of diminishing marginal returns is based on the assumption that all other factors of production are held constant, including the size of the factory, the amount of equipment and machinery, and the level of technology used. In this scenario, as more of a variable factor is added to a certain amount of a fixed factor, beyond some point, the marginal physical product falls. There are three stages of production which are:
1. Stage 1:
In the initial stage, the total physical product rises at an increasing rate. As more units of the variable factor are added, the marginal physical product also rises.
2. Stage 2:
In the second stage, the total physical product continues to rise, but at a decreasing rate. As more units of the variable factor are added, the marginal physical product falls.
3. Stage 3:
In the third stage, the total physical product begins to fall. This happens because the variable factor is overused and cannot be efficiently combined with the fixed factor.
Conclusion:
The Law of diminishing marginal returns is a fundamental concept in economics that explains how the marginal output of a production process decreases as the amount of a single factor of production is increased while holding the amounts of all other factors of production constant. This law helps to explain why companies must balance the costs and benefits of adding more resources to a production process.
The Law of diminishing marginal returns is a theory in economics that explains how the marginal output of a production process decreases as the amount of a single factor of production is increased while holding the amounts of all other factors of production constant.
Explanation:
The Law of diminishing marginal returns is based on the assumption that all other factors of production are held constant, including the size of the factory, the amount of equipment and machinery, and the level of technology used. In this scenario, as more of a variable factor is added to a certain amount of a fixed factor, beyond some point, the marginal physical product falls. There are three stages of production which are:
1. Stage 1:
In the initial stage, the total physical product rises at an increasing rate. As more units of the variable factor are added, the marginal physical product also rises.
2. Stage 2:
In the second stage, the total physical product continues to rise, but at a decreasing rate. As more units of the variable factor are added, the marginal physical product falls.
3. Stage 3:
In the third stage, the total physical product begins to fall. This happens because the variable factor is overused and cannot be efficiently combined with the fixed factor.
Conclusion:
The Law of diminishing marginal returns is a fundamental concept in economics that explains how the marginal output of a production process decreases as the amount of a single factor of production is increased while holding the amounts of all other factors of production constant. This law helps to explain why companies must balance the costs and benefits of adding more resources to a production process.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer?
Question Description
The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer?.
The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer?.
Solutions for The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:a)Total physical product begins to fallb)The marginal physical product risesc)The marginal physical product fallsd)The average physical product fallsCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup