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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

    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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