The traditional view of the production process is that capital is subject to

Diminishing Returns

Explanation:

A production factor has 'diminishing return' means; that output raise due to that factor increase keeps on decreasing with increase in the level of factor.

Traditional views ' capital subject to diminishing returns' state that : When level of capital increases, extra output yield from additional capital keeps on declining. Workers productivity or output depends on level of capital per worker, it increases steadily with each successive increase in capital / worker level. This implies capital increase - would lead to more output increase by workers with already less capital / labour, & less output increase by workers with already high capital / labour.

The 'diminishing returns to capital' view is important to determine output or income per labour, as a function of capital / labour. Because of diminishing returns, it is a swan shaped upward sloping curve (increasing at diminishing rate). This view also helps in understanding the relationship between savings, capital accumulation, output & income. It states how - higher saving lead to higher capital accumulation & higher income, but not at higher growth rates.

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o