Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 2 - The Key Principles of Economics - Exercises - 2.4 The Principle of Diminishing Returns - Page 46: 4.4

Answer

inflexible flexible

Work Step by Step

The principle of diminishing returns tells us that if a firm is inflexible and increases only one type of input then the marginal return will decrease. If a firm is flexible and adjusts all inputs, the principle of diminishing returns does not apply.
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