Which of the following best explains why increasing marginal costs of production arise?
A)The factor endowments vary across countries.
B)All the factor inputs are not fully utilized in the production of different commodities.
C)Different consumers have different taste and preference sets.
D)Different commodities use inputs in different proportions.

Question

Quizplus · Accepted Answer

Increasing marginal costs arise because different commodities use inputs in different proportions. As production is increased, inputs that are more specialized or less easily substituted for become scarce, causing their costs to rise. This results in the upward slope of the marginal cost curve.

Which of the Following Best Explains Why Increasing Marginal Costs