In general,which of the following implies that a marginal cost curve will eventually increase as a firm produces more output?
A)Profit maximizing behavior by the firm
B)A production function displaying increasing returns to scale
C)The law of diminishing returns
D)The law of equimarginal returns

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as a firm increases the quantity of a variable input while holding the quantities of all other inputs fixed, eventually the marginal product of the variable input will decline. As a result, the marginal cost of producing each additional unit of output will increase, leading to an upward-sloping marginal cost curve. Choices A, B and D do not necessarily imply an upward-sloping marginal cost curve.

In General,which of the Following Implies That a Marginal Cost