When a firm is experiencing diminishing marginal returns, marginal cost is
A)rising
B)falling
C)constant
D)rising at first, then falling
E)zero

Question

Quizplus · Accepted Answer

When a firm is experiencing diminishing marginal returns, it means that each additional unit of input (such as labor or capital) is becoming less productive. This causes the marginal cost of producing each additional unit of output to increase, as the firm needs to use more and more inputs to produce the same amount of output. Therefore, the correct answer is A) rising.

When a Firm Is Experiencing Diminishing Marginal Returns, Marginal Cost