Diminishing marginal returns occur when each additional worker hired is becoming less productive than the previous worker. Therefore, the correct statement regarding diminishing marginal returns would be that they typically occur when adding more of one input (like labor) while keeping other inputs constant leads to fewer additional outputs (i.e., productivity decreases).
From the options provided:
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occur when each additional worker hired is becoming more productive than the previous worker - This is incorrect, as diminishing marginal returns imply decreasing productivity.
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do not occur in a competitive market - This is incorrect; diminishing returns can occur in any market type.
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will happen when the average product is decreasing - This statement can be misleading because diminishing marginal returns relate to marginal product specifically. Average product can decrease without necessarily indicating diminishing returns in the marginal product.
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occur in the long run - This is incorrect; diminishing marginal returns typically refer to the short-run production scenario where not all inputs are variable.
None of the provided options accurately captures the concept of diminishing marginal returns in economic terms. A more accurate description would involve recognizing that it reflects a situation in the short run when adding more of one variable input results in less incremental output due to fixed inputs.
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