When the marginal product is increasing as the quantity increases, then, as the quantity increases, the
A) total cost is decreasing.
B) fixed cost is increasing.
C) average product is decreasing.
D) total product is decreasing.
E) marginal cost is decreasing.

Question

Quizplus · Accepted Answer

When the marginal product is increasing as the quantity increases, it means that each additional unit of input is generating more output than the previous one. This implies that the marginal cost of production is decreasing as well, as the cost of producing each additional unit of output is getting cheaper with each additional input. Therefore, the correct answer is E.

When the Marginal Product Is Increasing as the Quantity Increases