In general, a producer's marginal cost of additional units of quality as more units of quality are included in the product, causing the marginal cost curve from quality improvement to be _ sloping.
A)increases; downward
B)increases; upward
C)falls; downward
D)falls; upward

Question

Quizplus · Accepted Answer

As more units of quality are included in the product, the cost of producing an additional unit of quality increases. This is because the producer may need to invest in better technology or use higher quality materials, both of which increase the cost of production. Therefore, the marginal cost curve will slope upward as quality improves.

In General, a Producer's Marginal Cost of Additional Units of Quality