A firm uses only input A and input B to create an output. Suppose that initially the
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A firm uses only input A and input B to create an output. Suppose that initially the firm uses 10 units of input A and produces 5 units of output. When the firm increases its use of input A to 11 units, it produces 8 units of output. In addition, when the firm increases its use of input A again to 12 units, it produces 12 units of output. Assume all the amount of input B used remain constant.
How does this relate to the law of diminishing marginal returns?
Related Book For
An Introduction to Management Science Quantitative Approach to Decision Making
ISBN: 978-1337406529
15th edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
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