Question

In discussing the Law of Diminishing returns, when you at first see the Total product is rising at an increasing rate, so the Marginal product is positive and getting larger. This is called: Group of answer choices d. None of the other answers are correct. a. Diminishing marginal returns c. Negative marginal returns b. Increasing marginal returns

Answer 1

ANSWER:

Diminishing marginal returns - The law of diminishing marginal returns state that when optimum level of capacity is reached then if one additional unit will be produced it woould result in less increase in output.

Negative marginal returns - Negative marginal returns means when more and more inputs are employed a point will come where marginal product becomes negative. It means that with additional unit of input employed the output starts decreasing.

Increasing marginal returns - Increasing marginal returns implies that total product increases at an incrreasing rate. It means that by employing additional unit of input the output increses at an increasing rate.

Hence, The statement given in question " when you at first see the Total product is rising at an increasing rate, so the Marginal product is positive and getting larger. This is called Increasing marginal returns.

Therefore, The answer is (b) increasing marginal returns.