As a firm increases production in the short run,the marginal cost of output increases because the marginal product of the variable input decreases.

Question

Quizplus · Accepted Answer

This is known as the law of diminishing marginal returns, which states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease, leading to an increase in marginal cost.

As a Firm Increases Production in the Short Run,the Marginal