The shape of the marginal cost curve reflects the
A)Law of diminishing returns.
B)Competitiveness of the firm.
C)Law of diminishing marginal utility.
D)Law of demand.

Question

Quizplus · Accepted Answer

The shape of the marginal cost curve reflects the law of diminishing returns, as it shows the additional cost incurred in producing each additional unit of output as the production reaches its maximum capacity. As output increases, the marginal cost initially decreases and then starts increasing at a higher rate due to diminishing returns to scale.

The Shape of the Marginal Cost Curve Reflects the