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Question
Diminishing returns to a factor occur simply because supply of all factors cannot be increased.
Diminishing returns to a factor occur simply because supply of all factors cannot be increased.
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Solution
The correct option is A True
It is because some factors are fixed that output is increased by using more and more units of the variable factor. It disturbs the ideal factor ratio and diminishing returns set in.
It is because some factors are fixed that output is increased by using more and more units of the variable factor. It disturbs the ideal factor ratio and diminishing returns set in.
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