Find out from the following table by which law the firm is working- Units of input Total production 1 10 2 25 Law of increasing returns 3 50 4 85 5 135 6 135 Origin parity rule 7 130 Law of diminishing returns

Law of diminishing returns
Law of constant returns
Law of increasing returns
All of the above

The correct answer is: Law of diminishing returns.

The law of diminishing returns states that, in all productive processes, adding more of one factor of production, 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 a factor will always decrease the production, just that the marginal (additional) output per unit of the factor will eventually decrease.

In the table, we can see that the total production increases as the number of units of input increases. However, the rate of increase in total production decreases as the number of units of input increases. This is because the law of diminishing returns is in effect.

When the firm is working with 1 unit of input, it produces 10 units of output. When the firm adds a second unit of input, it produces 25 units of output. This is an increase of 15 units of output. When the firm adds a third unit of input, it produces 50 units of output. This is an increase of 25 units of output. When the firm adds a fourth unit of input, it produces 85 units of output. This is an increase of 35 units of output. When the firm adds a fifth unit of input, it produces 135 units of output. This is an increase of 50 units of output. When the firm adds a sixth unit of input, it produces 135 units of output. This is an increase of 0 units of output.

This shows that the rate of increase in total production is decreasing. This is because the law of diminishing returns is in effect. As the firm adds more units of input, the marginal (additional) output per unit of input decreases.

Therefore, the correct answer is: Law of diminishing returns.

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