Marginal cost ________ as the quantity produced increases.
A)initially decreases and then increases
B)always decreases
C)always increases
D)initially increases and then decreases
E)becomes negative

Question

Quizplus · Accepted Answer

Initially, the marginal cost decreases due to economies of scale and specialization. As production increases, however, the marginal cost starts to rise due to diminishing marginal returns and the need for additional resources to maintain production levels.

Marginal Cost ________ as the Quantity Produced Increases