Refer to the diagram to the right Diminishing returns to lab

Refer to the diagram to the right. Diminishing returns to labor set in OA, after L1. OB, after L2 O C. after L3 OD. immediately. Labor (units) Click to select your answer

A) after L₁

When increase in quantity of labor decreases output per worker then it is said that diminishing returns occurs. Downward sloping curve but above negative output represents diminshing returns. Labor units between L₁ and L₃ represents diminishing returns.