In the short run,a firm's marginal cost rises because of:
A)a decline in output prices.
B)a decline in marginal productivity of inputs.
C)decreasing returns to scale.
D)the flexibility in input usage.

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost of producing one more unit of output. When the marginal productivity of inputs decreases, it means that the firm needs to use more inputs to produce the same level of output. This leads to an increase in marginal cost in the short run. The other options are not relevant to explaining the short-run increase in marginal cost.

In the Short Run,a Firm's Marginal Cost Rises Because Of