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    Question

     Law of diminishing returns only applies to cases where

    A There is increasing scarcity of factors of production Correct Answer Incorrect Answer
    B The price of extra units of a factor is increasing Correct Answer Incorrect Answer
    C There is atleast one fixed factor of production Correct Answer Incorrect Answer
    D Capital is a variable input Correct Answer Incorrect Answer
    E Labour is fixed Correct Answer Incorrect Answer

    Solution

    Law of diminishing returns only applies to cases where there is atleast one fixed factor of production.

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