What effect does diminishing marginal product have on labor input?

Diminishing marginal product refers to the phenomenon where, as more units of labor are added to a fixed amount of capital and resources, the additional output generated by each new unit of labor begins to decline. This is a fundamental concept in production theory and reflects the idea that while initially adding more labor can enhance productivity significantly, there comes a point where each additional worker contributes less and less to overall output.

In this context, if we consider what happens when more labor is introduced, it's important to understand that although total output may continue to grow with additional workers, the increase in output from each subsequent worker will eventually decline. This decline in the increase is what is meant by "decreasing the productivity of each additional labor unit." As more labor is added, the available capital (like machinery or space) becomes a constraint, and workers may find themselves less efficient due to overcrowding or less effective means of utilizing the available resources.

Therefore, the correct answer accurately reflects the effect of diminishing marginal product on labor input, highlighting that each additional labor unit contributes less to overall productivity than the previous ones. This concept is vital for understanding labor markets and production efficiencies in macroeconomic theory.