Which of the following is true at the point where diminishing returns set in?
A) Both marginal product and marginal cost are at a maximum.
B) Both marginal product and marginal cost are at a minimum.
C) Marginal product is at a maximum and marginal cost at a minimum.
D) Marginal product is at a minimum and marginal cost at a maximum.

Question

Quizplus · Accepted Answer

At the point where diminishing returns set in, the marginal product of an additional unit of input reaches its maximum, meaning any further increases in input will result in a smaller increase in output. Consequently, because marginal cost is the cost of producing one more unit of a good, it is at its minimum when the efficiency of production is at its peak, which corresponds with the maximum marginal product.

Which of the Following Is True at the Point Where