The short-run marginal-cost curve is upward-sloping because of the law of diminishing marginal returns.

Question

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The law of diminishing marginal returns states that as more units of a variable input (like labor) are added to fixed inputs (like capital), the additional output produced from each new unit of the variable input will eventually decrease. This leads to an increase in marginal costs for producing additional units, making the short-run marginal-cost curve upward-sloping.

The Short-Run Marginal-Cost Curve Is Upward-Sloping Because of the Law