Diminishing marginal returns occur when additional workers increase total output at a decreasing rate. This means that while hiring more workers can initially lead to a significant increase in output, after a certain point, each additional worker contributes less to total production than the previous one. This is a fundamental concept in economics, reflecting the law of diminishing returns in production processes.
When do diminishing marginal returns occur?
when additional workers increase total output at a decreasing rate
when some workers increase output but others decrease it
when the marginal product of labor increases as the number of workers increases
when extra workers will have to wait their turn to be productive
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