What does the production function model predict about output with changes in inputs?

The production function model describes the relationship between the quantity of inputs used in production and the resulting output. The correct answer highlights a key characteristic of most production functions, which is the principle of diminishing marginal returns. As additional units of an input are added, while keeping other inputs constant, the additional output generated by each extra unit of input eventually begins to decrease. This means that while output continues to increase as more inputs are added, the rate of that increase slows down.

This behavior reflects a realistic scenario in production where resources may become less effective when overused, leading to less efficient use of inputs beyond a certain point. Therefore, the production function indicates that output increases at a decreasing rate with more inputs, capturing the insights provided by economic theory on the production process.