From the curve above, at what point is it advisable for the farmer to stop further addition of input?
- I
- II
-
III
- IV
The correct answer is: C
Explanation
At III law of Diminishing returns sets in.
Diminishing returns, also called law of diminishing returns or principle of diminishing marginal productivity, economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.