The law of diminishing returns means that marginal costs will eventually rise as a firm produces more.

Question

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The law of diminishing returns states that as a firm increases its input of a certain factor of production (such as labor), after a certain point, the marginal product of that factor will decrease. This means that each additional unit of input will produce less and less output, causing marginal costs to eventually rise as the firm continues to produce more.

The Law of Diminishing Returns Means That Marginal Costs Will