According to the principle of diminishing marginal productivity, what happens as additional units of a variable input are added to a fixed input in the production process?

• A. Total output decreases with each additional unit of input.
• B. The marginal product of the variable input eventually decreases.
• C. The marginal product of the variable input remains constant.
• D. The marginal product of the variable input always increases.

Answer: (B)

Verified step by step guidance

1. Understand the principle of diminishing marginal productivity: it states that as you add more units of a variable input (like labor) to a fixed input (like capital or land), the additional output produced by each new unit of the variable input will eventually decline.
2. Recognize that initially, adding more of the variable input may increase total output at an increasing rate due to better utilization of the fixed input.
3. Identify that after a certain point, the marginal product (the additional output from one more unit of input) starts to decrease, even though total output may still be increasing but at a slower rate.
4. Note that the marginal product does not remain constant or always increase; instead, it eventually diminishes because the fixed input limits the efficiency of additional variable inputs.
5. Conclude that the correct interpretation is: the marginal product of the variable input eventually decreases as more units are added to a fixed input, which aligns with the principle of diminishing marginal productivity.