Marginal cost
A)Rises as a direct result of diminishing returns.
B)Falls whenever marginal physical product decreases.
C)Falls in the short run because some resources are fixed.
D)Rises whenever marginal revenue product rises.

Question

Quizplus · Accepted Answer

Marginal cost rises as a direct result of diminishing returns because as more units of a variable input are added to a fixed input, its marginal physical product eventually decreases, making each additional unit of output more costly to produce.

Marginal Cost