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      Question

      Which law states that the profit from a limited amount

      of variable input is maximized when that input is used in such a way that marginal return from that input is equal in all the enterprises?
      A Law of Diminishing marginal returns Correct Answer Incorrect Answer
      B Law of Variable proportions Correct Answer Incorrect Answer
      C Law of Equimarginal returns Correct Answer Incorrect Answer
      D Principle of Combining enterprises Correct Answer Incorrect Answer
      E Law of substitution Correct Answer Incorrect Answer

      Solution

      Law of Equimarginal returns states that the profit from a limited amount of variable input is maximized when that input is used in such a way that marginal return from that input is equal in all the enterprises. This law is concerned with the allocation of the limited amount of resource among different enterprises.

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