Question

1.
Provide the term for the following statements:
1.1
Businesses do not maximise output from the given inputs.​

Answer 1

Answer:

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Answer 2

The term is referred to as diminishing returns.

• According to the fundamental law of returns, typically introducing a new factor of production leads to smaller improvements in standard output.

• Under this even though the production input is progressively increased, the standard output is typically reduced.

• Once a certain level of capacity utilisation is achieved, adding production elements will then lead to lower per-unit additional returns.