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Definition and example of the Law of Diminishing Returns

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The following table gives total output or total product as a function of labor units used.

LABOR TOTAL OUTPUT
0 0
1 5
2 9
3 12
4 14
5 15

a) Define diminishing returns.
b) Does the table indicate a situation of diminishing returns? Explain.

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Solution Summary

What are diminishing returns? Is the given data an example of diminishing returns? How do we make that determination?

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a) The Law of Diminishing Returns states that as more units of one input are added, with ...

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