Diminishing returns are a reason that:
A)the marginal cost curve is downward sloping.
B)fixed costs remain constant.
C)the marginal cost curve is upward sloping.
D)the average fixed cost curve is downward sloping.

Question

Quizplus · Accepted Answer

Diminishing returns occur when additional units of variable inputs lead to smaller increases in output. This results in the marginal cost curve being upward sloping, as each additional unit produced becomes more expensive. The phenomenon of diminishing returns does not directly impact fixed costs, so choices A and D are incorrect.

Diminishing Returns Are a Reason That