Asked by Julianna Velaj on May 12, 2024
Verified
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.
Diminishing Returns
Diminishing returns, a concept in economics, occurs when adding an additional factor of production results in a lower increment of output, assuming other factors are constant.
- Comprehend the principle and consequences of diminishing labor returns.
Verified Answer
MG
Maribel GaytanMay 15, 2024
Final Answer :
C
Explanation :
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.
Learning Objectives
- Comprehend the principle and consequences of diminishing labor returns.