Marginal cost _______ over the range of _______ , then _______ over the range of _______ .
A) falls; increasing marginal returns; rises; diminishing marginal returns
B) rises; increasing marginal returns; falls; diminishing marginal returns
C) falls; decreasing returns; rises; increasing returns
D) rises; diminishing marginal returns; falls; constant marginal returns

Question

Quizplus · Accepted Answer

When there are increasing marginal returns, each additional unit of output costs less to produce, resulting in a falling marginal cost. However, as output continues to increase, the law of diminishing marginal returns comes into effect, causing the marginal cost to rise. Therefore, A is the correct answer.

Marginal Cost _______ Over the Range of _______ , Then

Marginal Cost _ Over the Range of _ , Then