The law of increasing additional cost exists because
A) resources are not perfectly adaptable to both production processes.
B) the demand for the product increases.
C) the cost of resources of the products increase.
D) the cost of resources of the products decrease.

Question

Quizplus · Accepted Answer

The law of increasing additional cost states that as the production of a good increases, the additional cost (or marginal cost) of producing each additional unit also increases. This is because resources are not perfectly adaptable to both production processes, and as production increases, less efficient resources are used, causing the cost of production to increase. This is why choice A is the correct answer.

The Law of Increasing Additional Cost Exists Because