Question

Fill in the blank with appropriate alternative given below

Land is subject to ___________ returns.

Options

• increasing

• constant

• diminishing

• negative

Answer 1

Land is subject to diminishing returns.

Explanation:
Land is a fixed factor of production. When more and more units of labour and capital are applied to land, the total output increase  but only at a decreasing rate.
Thus, we can say that land is subject to diminishing returns.