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Question

The "law of diminishing returns" applies to _________________.
  1. short run, but not long run
  2. long run, but not short run
  3. both short run and long run
  4. neither short run nor long run

A
neither short run nor long run
B
long run, but not short run
C
both short run and long run
D
short run, but not long run
Solution
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The "Law of diminishing returns" is a part of law of variable proportion which applies to the short run, but not the long run.

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