Causes for diminishing returns to factor

What are the causes for diminishing returns to factor?

Answer:

1) Over utilization of fixed factors: As more and more units of the variable factor carries to be joined with similar fixed factor, the fixed factor gets over employed.

2) Imperfect factor substitution: More and more of variable factor can’t be continuously employed in place of fixed factor.

View Complete Question

Related Questions in Microeconomics

Q : Illustrates the Loren curve by total

When 40 percent of total personal income was received by 20 % of the highest income families, in that case the: (w) income distribution would be perfectly equal. (x) income pattern would be foreign to the U.S. (y) Lorenz curve would be the 45 degree r

Q : Needs firm by maximizing profits for

Maximizing profit needs every firm to manufacture the output level where marginal is: (i) revenue is maximized. (ii) cost equals the lowest possible average total cost. (iii) revenue equals marginal cost. (iv) revenue exceeds ma

Q : Raise current consumption by rising in

When interest rates rise, in that case the opportunity costs of: (1) current consumption rise. (2) future consumption rise. (3) current investment decline. (4) government budget deficits decline. (5) saving grows proportionally.

Q : Capital or current account Is import of

Is import of machinery recorded in capital or current account? Answer: It is recorded in current account since it deals as the purchase of goods.

Q : Price hike problem of durable good I

I have a problem in economics on Price hike problem of durable goods. Please help me in the following question. The expectations of price hikes for durable goods tend to: (i) Raise current production, however only for later sale. (ii) Cause firms to r

Q : Firms and the Transaction Costs Can

Can someone help me in finding out the right answer from the given options. The survival of all firms eventually depends on the capability to: (i) Decrease transaction costs to consumers. (ii) Produce economic gain. (iii) Maximize the value of output for given cost. (

Q : Blacklisting-Labor history Can someone

Can someone please help me in finding out the accurate answer from the following question. Firms which colluded by circulating the names of the union organizers and hence they would have difficulty getting jobs were engaged in a now-illegal practice termed as: (1) Fea

Discover Q & A

Leading Solution Library

Avail More Than 1461066 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1945805
Asked

3,689

Active Tutors

1461066

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment