When diminishing marginal returns occurs, the
A) total variable cost starts to rise.
B) total cost starts to rise.
C) average total cost starts to rise.
D) average variable cost starts to rise.
E) marginal cost starts to rise.

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when adding an additional unit of input results in a smaller increase in output than previous units of input. This means that the marginal cost of producing one more unit of output increases, as more and more resources are required to produce the same additional unit of output. Therefore, the correct answer is E – marginal cost starts to rise.

When Diminishing Marginal Returns Occurs, the