88.

In the diagram, the range of diminishing marginal returns is

A. 0Q3.
B. 0Q2.
C. Q1Q2.
D. Q1Q3.

Question

88.

In the diagram, the range of diminishing marginal returns is

A. 0Q3.
B. 0Q2.
C. Q1Q2.
D. Q1Q3.

BlackTom AI · Accepted Answer

Diminishing marginal returns means the marginal product (MP) of an input is falling as additional units of that input are employed — each extra worker adds less output than the previous one. Key facts from the diagram: MP reaches its maximum at Q1, MP declines after Q1, MP crosses the average product (AP) at Q2, and MP falls to zero at Q3 (MP becomes negative beyond Q3).

Step-by-step reasoning:
1. Identify the relevant curves and points: the higher, hump-shaped curve is MP; its peak is at Q1. The AP curve peaks later and is crossed by MP at Q2. The MP curve hits the horizontal axis (MP = 0) at Q3.
2. Determine where marginal returns are diminishing: diminishing marginal returns begin once MP stops increasing — i.e., immediately after the MP peak at Q1 — because from that point each additional unit of labor raises output by a smaller amount than the previous unit.
3. Determine where diminishing returns end: strictly speaking diminishing marginal returns continue while MP is positive but falling. When MP reaches zero (at Q3) we have exhausted additional positive contributions; beyond Q3 marginal product becomes negative (negative returns), which is different from diminishing positive returns.
4. Therefore the range over which MP is declining (diminishing marginal returns) extends from Q1 (the MP peak) to Q3 (MP = 0).

Why the correct answer is correct:
- Option D (Q1–Q3) exactly marks the interval where MP is falling from its maximum down to zero, which is the textbook range of diminishing marginal returns.

Why the other options are incorrect:
- A (0–Q3) includes 0–Q1, where MP is rising (increasing returns), so it wrongly includes an increasing phase.
- B (0–Q2) likewise includes the rising portion up to Q1 and stops at Q2, omitting the continued decline of MP between Q2 and Q3.
- C (Q1–Q2) only captures the early part of the decline; MP continues to fall after Q2 until Q3, so C is too short.

Conclusion: The correct range of diminishing marginal returns is Q1 to Q3, matching the provided answer D.

88. In the diagram, the range of diminishing marginal returns is A. 0Q3. B. 0Q2. C. Q1Q2. D. Q1Q3.Single choice

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