Which of the following statements is true?

Question

Quizplus · Accepted Answer

This statement reflects the concept of diminishing marginal returns, which states that after a certain level of input, the marginal product decreases. When the marginal product of variable input starts to fall, the cost of producing the additional unit also increases, which implies that the marginal cost of production must be rising. Option A is incorrect because the law of diminishing returns implies that the marginal product will eventually decrease after a certain input level. Option B is incorrect because the marginal product refers to the change in the total output by increasing one unit of variable input, not fixed input. Option C is incorrect because fixed costs do not vary with the output level; instead, they remain the same regardless of the level of output.

Which of the Following Statements Is True