If the marginal product of labor is decreasing, then marginal cost of production must be rising.

Question

Quizplus · Accepted Answer

When the marginal product of labor is decreasing, it means that each additional unit of labor is producing less output than the previous unit. This implies that the cost of producing an additional unit of output is increasing, which means that marginal cost is rising. Therefore, A is the correct answer. This is because marginal cost is the additional cost of producing an extra unit of output. As such, when the marginal product of labor decreases, it implies that more labor is required to produce an additional unit of output, which leads to an increase in marginal cost.

If the Marginal Product of Labor Is Decreasing, Then Marginal