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21 September, 04:36

What should a firm do once it realizes it is in a situation with a diminishing marginal product? The firm - stop producing additional units. If marginal product is -, the firm should continue production if it can sell the output for more than the - costs.

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  1. 21 September, 04:46
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    Answer: the firm should continue production if it can sell the output for more than the - costs.

    Explanation: In simple words, diminishing marginal returns refers to a situation in which employing an additional unit of input will result in increase in output but with a less marginal benefit.

    The firm should continue to produce as the overall profit will be high till the cost is less than the revenue.
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