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    Question

    The situation in a production process where each

    successive unit of input contributes more output than the previous unit is explained by the law of:
    A Constant returns Correct Answer Incorrect Answer
    B Increasing returns Correct Answer Incorrect Answer
    C Decreasing returns Correct Answer Incorrect Answer
    D Diminishing marginal returns Correct Answer Incorrect Answer
    E Equal returns Correct Answer Incorrect Answer

    Solution

    The law of increasing returns applies in the initial phase of input use when marginal productivity rises due to better input utilization or synergy among inputs.

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