all product functions show diminishing marginal returns in the short run when an input is fixed? true or false?

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Hubert KochLv2

2 Jan 2019

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Related questions

What is the difference between "diminishing marginal returns" and "diseconomies of scale"?

(i) Diminishing marginal returns that apply only in the short run, when at least one factor is fixed, explains why marginal cost increases, while diseconomies of scale which applies in the long run, when all factors are variable, explains why average cost increases.

(ii) Diminishing marginal returns which apply only in the short run, when at least one factor is fixed, explains why average variable cost increases, while diseconomies of scale which applies in the long run, when all factors are variable, explains why average total cost increases.

(iii) Both concepts explain why marginal cost increases after some point but diminishing marginal returns applies only in the short run when there is at least one fixed factor, while diseconomies of scale apply in the long run when all factors are variable.

(iv) Both concepts explain why average total cost increases after some point but diminishing marginal returns applies only in the short run when there is at least one fixed factor, while diseconomies of scale apply in the long run when all factors are variable.

cerisehare907

TRUE OR FALSE

____ 16. The law of diminishing marginal returns provides an explanation for why Average Cost eventually increases as output is expanded in the short run.

____ 17. The marginal product is the increase in output per additional unit of input.

____ 18. As output increases, marginal cost increases, reaches a maximum, and then falls.

____ 19. The marginal product curve rises when the marginal cost curve rises.

____ 20. If a firm is producing an output level at which marginal revenue exceeds marginal cost in the short run, the firm will increase profits by reducing its output level.

plumjellyfish99

True/False (Explain) (The explanation is the most important part â no credit will be given for True/False answer alone)

1. âTechnological improvementâ refers to an increase in the amount of capital used, which causes the productivity of labor to increase.

2. A production function that is characterized by constant returns to scale cannot also have diminishing marginal returns to labor.

3. The average product of labor at any level of production describes the average amount by which output should be expected to increase if another unit of labor is added.

4. The short-run marginal cost curve slopes upward when the inputs to production exhibit diminishing marginal returns.