If the law of diminishing marginal productivity holds true, eventually both the marginal cost curve and the average cost curve must become:
A) vertical lines.
B) downward sloping.
C) upward sloping.
D) horizontal lines.

Question

Quizplus · Accepted Answer

As diminishing marginal productivity sets in, additional units of input contribute less to output, causing marginal costs to rise, which in turn causes average costs to rise, making both curves upward sloping.

If the Law of Diminishing Marginal Productivity Holds True, Eventually