The correct answer is: D. The average output declines faster than marginal output.
The law of diminishing returns states that in all productive processes, adding more of one input, while holding all others constant (“ceteris paribus”), will at some point yield lower incremental per-unit returns. The law of diminishing returns does not imply that adding more of an input will always decrease the total output. In fact, in some cases, the total output may continue to increase, but at a decreasing rate.
The law of diminishing returns is a fundamental economic principle that has important implications for a wide range of issues, including production, investment, and economic growth.
Option A is incorrect because the total output can increase even as the law of diminishing returns is in effect.
Option B is incorrect because the stage of technical knowledge can change even as the law of diminishing returns is in effect.
Option C is incorrect because land is not the only factor that can be increased in a productive process.
I hope this helps!