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If labour is the only variable resource and its marginal physical product falls as moreworkers are hired:

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Question:

If labour is the only variable resource and its marginal physical product falls as moreworkers are hired:

A.

The law of diminishing marginal returns is at work.

B.

Marginal cost is rising.

C.

Average cost may still be declining.

D.

Average physical product may still be rising.

Answer» a. The law of diminishing marginal returns is at work.

Note: The above multiple-choice question is for all general and Competitive Exams in India.