Suppose the marginal cost curve in the short run first decreases and then increases.If marginal cost is increasing,_____ must be _____.
A)marginal product;increasing
B)average variable cost;increasing
C)average total cost;increasing
D)marginal product;decreasing

Question

Quizplus · Accepted Answer

When marginal cost is increasing, it typically means that each additional unit of output is costing more to produce than the previous one, which usually occurs because the marginal product of labor (or other inputs) is decreasing. This is due to the law of diminishing returns, where after a certain point, adding more of a variable input to a fixed input will yield lower increments of output.

Suppose the Marginal Cost Curve in the Short Run First