Question

______ states that as more and more units of variable factors are combined with the fixed factor, marginal product of the variable factor ultimately decreases.

Answer 1

The Law of Variable Proportions states that as more and more units of variable factors are combined with the fixed factor, marginal product of the variable factor ultimately decreases.

Explanation:

This fundamental economic law states that as a firm adds more units of a variable factor (like labour) to a set of fixed factors (like machinery), a point is eventually reached where the additional output produced by each new worker begins to drop. This happens because the fixed factors become overcrowded, causing the marginal product to ultimately decrease.