To a firm facing constant input prices,increasing marginal returns _____
A)mean that each additional unit of output costs more to produce than the previous unit.
B)mean that the marginal product of the variable input decreases as more of the input is used.
C)can occur due to the specialization and division of labor.
D)usually occur at very high rates of output.
E)can never occur.

Question

Quizplus · Accepted Answer

Increasing marginal returns can occur due to specialization and division of labor. As the firm focuses on producing more of a particular good or service, workers become more specialized, which can result in increased productivity and efficiency.

To a Firm Facing Constant Input Prices,increasing Marginal Returns _____