diminishing marginal return

machines labour total marginal
(units) (units) output output

2 10 10
2 11 24 14
2 12 42 18
2 13 62 20
2 14 X Y


If the law of diminishing marginal returns applies, marginal output Y must be smaller than 20. Total output X must be smaller than 82.


The correct answer is C.




2011-01-01 02:49:07 補充：
The question states that "the law of diminishing returns applies to the firm",answer D (total output=82) does not satisfy the condition. D is a point of leveling (constant) marginal returns and not a point of diminishing marginal returns.

If the law of diminishing marginal returns applies to the firm, X
D can be equal to 82


The marginal returns can still be increase until a point to diminshing.

Difference between (12 & 13 units of labours) is 20 so it can be (NOT must be) greater or equal or smaller than 82 (62 + 20).