When the short-run marginal cost curve is upward-sloping,
A)The average total cost curve is upward-sloping.
B)The average total cost curve is above the marginal cost curve.
C)Diminishing returns occurs with greater output.
D)There are diseconomies of scale.

Question

Quizplus · Accepted Answer

When the short-run marginal cost curve is upward-sloping, it indicates that diminishing returns occur with greater output. This means that each additional unit of output requires more and more inputs, causing the marginal cost to increase. As a result, the average total cost curve may also be upward-sloping, but it could still be below the marginal cost curve. Diseconomies of scale may or may not occur, depending on the specific circumstances of the firm.

When the Short-Run Marginal Cost Curve Is Upward-Sloping