Ashley Bakery expects its marginal cost curve will eventually slope upward, because as with most production processes, baking has:
A) constant opportunity costs.
B) a maximum efficient scale.
C) diminishing marginal returns.
D) decreasing opportunity costs.

Question

Quizplus · Accepted Answer

Diminishing marginal returns occur when adding an additional factor of production results in a smaller increase in output, leading to an upward-sloping marginal cost curve.

Ashley Bakery Expects Its Marginal Cost Curve Will Eventually Slope