In the context of production, the law of diminishing returns applies when:
A. All factors are variable
B. There are increasing returns to scale
C. At least one factor is fixed and others are variable
D. Technology is changing continuously
Answer: Option C
Solution (By JKSSB Mock Tests)
The law of diminishing returns (or variable proportions) operates in the short run when one or more factors are fixed and additional units of a variable factor are added.
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