Question: Assume a production function with only two inputs, capital and labor. In this case, the concept of a diminishing marginal product of capital implies that
Assume a production function with only two inputs, capital and labor. In this case, the concept of a diminishing marginal product of capital implies that
A as less capital is being used, more and more labor has to be employed to increase output
B as both labor and capital inputs are increased, output increases but at a decreasing rate
C as the amount of capital is increased and the amount of labor remains fixed, output increases but at a decreasing rate
D as the amount of capital increases and the amount of labor remains fixed, output cannot increase
E labor inputs have a bigger impact on increasing output than capital inputs.
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