In the short run, a firm will eventually experience rising average total costs because of
A) economies of scale.
B) diseconomies of scale.
C) the law of supply.
D) the law of diminishing returns.

Question

Quizplus · Accepted Answer

In the short run, as more units of a variable input are added to a fixed input, the additional output from each new unit will eventually decrease, leading to rising average total costs. This is due to the law of diminishing returns.

In the Short Run, a Firm Will Eventually Experience Rising