In a short-run production process, a diminishing marginal product of labor explains why marginal cost is
A) positive and rising.
B) positive but falling.
C) zero.
D) negative and falling.

Question

Quizplus · Accepted Answer

In a short-run production process, diminishing marginal product of labor means that each additional unit of labor contributes less to output than the previous one. This leads to an increase in the cost of producing each additional unit, hence marginal cost is positive and rising.

In a Short-Run Production Process, a Diminishing Marginal Product of Labor