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Question
What is
the law of diminishing marginal product?
What is the law of diminishing marginal product?
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Solution
Law of
diminishing Marginal Product
According
to this law, if the units of the variable factor keeps on increasing
keeping the level of the fixed factor constant, then initially the
marginal product will rise but finally a point will be reached after
which the marginal product of the variable factor will start falling.
After this point the marginal product of any additional variable
factor will be zero, and can even be negative.
Law of diminishing Marginal Product
According to this law, if the units of the variable factor keeps on increasing keeping the level of the fixed factor constant, then initially the marginal product will rise but finally a point will be reached after which the marginal product of the variable factor will start falling. After this point the marginal product of any additional variable factor will be zero, and can even be negative.
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