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

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as additional units of a variable input are added to a fixed input, eventually the marginal product of the variable input will decrease. This leads to an increase in marginal cost, as producing additional units becomes more expensive due to the need for more input units per output unit. Therefore, the short-run marginal-cost curve is upward-sloping.

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