Which of the following is true of marginal cost when marginal returns are increasing?
A)It is negative and increasing.
B)It is negative and decreasing.
C)It is positive and increasing.
D)It is positive and decreasing.
E)It is positive and has a constant slope.

Question

Quizplus · Accepted Answer

When marginal returns are increasing, marginal cost initially decreases due to the increasing productivity of inputs. However, at some point, the law of diminishing returns sets in and marginal cost starts increasing. Therefore, marginal cost is positive and increasing.

Which of the Following Is True of Marginal Cost When