As a firm expands output, in the short run marginal costs will
A) always decline as output expands.
B) increase at first but eventually level off and decline.
C) eventually increase as the firm experiences diminishing returns to the fixed factors of production.
D) initially increase at a decreasing rate but eventually increase at an increasing rate.

Question

Quizplus · Accepted Answer

In the short run, as a firm expands output, it will eventually experience diminishing returns to the fixed factors of production, leading to an increase in marginal costs.

As a Firm Expands Output, in the Short Run Marginal