Scenario 13-4
A firm experiences decreasing marginal product of labour with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-4.How will marginal cost behave
A)It will always rise.
B)It will always fall.
C)It will be U-shaped, first falling and then rising.
D)It will remain constant.

Question

Quizplus · Accepted Answer

Since the marginal product of labour is decreasing with each additional worker, the marginal cost of producing each additional unit will increase. This is because the firm has to add more and more workers to produce the same amount of output, leading to higher labour costs and higher marginal costs. Therefore, the correct answer is A, marginal cost will always rise in this scenario.

Scenario 13-4 a Firm Experiences Decreasing Marginal Product of Labour with the with the Addition