As a firm increases production in the short run, the marginal cost of output increases because the marginal product of the variable input decreases.False

Question

Quizplus · Accepted Answer

In the short run, as a firm increases production, it often faces diminishing marginal returns, meaning the marginal product of the variable input decreases, leading to an increase in marginal cost.

As a Firm Increases Production in the Short Run, the Marginal