The marginal cost of producing a commodity increases because of specialization.

Question

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The marginal cost of producing a commodity increases because of specialization because as a producer specializes in producing a particular commodity, they become more efficient at producing that commodity. This increased efficiency leads to a decrease in the average cost of producing the commodity, but an increase in the marginal cost of producing the commodity.

The Marginal Cost of Producing a Commodity Increases Because of Specialization