When the marginal product of labor increases, the marginal cost_______ and when the marginal product of labor reaches its maximum the marginal cost is at its_______ .

Question

Quizplus · Accepted Answer

When the marginal product of labor increases, the marginal cost decreases because the additional input of labor is leading to an increase in output at a decreasing rate of cost. When the marginal product of labor reaches its maximum, the marginal cost is at its minimum because any additional input of labor beyond this point would lead to a decrease in output at an increasing rate of cost. Therefore, option C is the correct choice.

When the Marginal Product of Labor Increases, the Marginal Cost_______