12. When do diminishing marginal returns occur?

A. When the marginal product of labor increases as the number of workers increases
B. When some workers increase output but others decrease it
C. When additional workers increase total output at a decreasing rate
D. When extra workers will have to wait their turn to be productive

Diminishing marginal returns occur when additional workers increase total output at a decreasing rate. This means that as more labor is added to a fixed amount of capital, the marginal product of labor declines, resulting in each additional unit of labor contributing less to total output. For example, in the production of pizzas with a fixed number of pizza ovens, hiring more workers eventually leads to them getting in each other's way, causing diminishing returns.

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