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The falling extra output from each additional unit of an input illustrates:
AConstant marginal returns
BRising average returns
CDiminishing marginal returns
DIncreasing marginal returns
Answer & Solution
Correct answer: C. Diminishing marginal returns
1. Adding more of one input to a fixed amount of another eventually pays less well.
2. Several patterns in production share this shape.
3. Both concepts are examples of the more general concept of diminishing marginal returns.
4. It is the reason marginal cost eventually rises as output expands.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 7 'Production, Costs and Industry Structure', sections 7.1-7.4_
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