As a typical firm increases its output,its marginal cost
A) is constant.
B) decreases at first and then increases.
C) increases at first and then decreases.
D) decreases.
E) is negative at first and then positive.

Question

Quizplus · Accepted Answer

Marginal cost tends to decrease at first due to economies of scale and then increases as output rises due to diseconomies of scale.

As a Typical Firm Increases Its Output,its Marginal Cost