The law of diminishing returns explains why short-run marginal cost curves are upsloping.

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more of a variable input (like labor) is added to a fixed input (like capital or land), the additional output produced from each new unit of the variable input will eventually decrease. This principle leads to an increase in the marginal cost of production as more units are produced, which is why short-run marginal cost curves are typically upsloping.

The Law of Diminishing Returns Explains Why Short-Run Marginal Cost