Economics 9708 · AS & A Level · Factors of production

Factors of production — practice question

Which statement accounts for why labour is governed by the law of diminishing returns in the short run?

  • AAs additional workers are hired, total output decreases.
  • BAs employment increases, the capital-labour ratio falls.
  • CAs employment increases, wage rates will have to be increased.
  • DAs output increases, eventually diseconomies of scale will occur.

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