Asked by Aveyan Walker on Jul 23, 2024
Verified
The total cost curve gets steeper as output increases because of:
A) increasing returns to the variable input.
B) decreasing returns to the variable input.
C) increases in fixed cost.
D) decreases in overhead costs.
Total Cost Curve
A graphical representation showing the total cost incurred by a firm at different levels of output.
Variable Input
An input in the production process that can be adjusted in the short term to change the level of output.
- Gain insight into the notion of diminishing marginal returns and its ramifications for production output.
- Review the influence of burgeoning and waning marginal returns on marginal cost.
Verified Answer
JD
Julisa Del RioJul 23, 2024
Final Answer :
B
Explanation :
The total cost curve gets steeper as output increases because of decreasing returns to the variable input. This means that as the firm produces more, it requires additional units of inputs to produce each additional unit of output, which leads to increased costs. As a result, the cost curve becomes steeper. In other words, as output increases, the marginal cost of production increases, which in turn causes the cost curve to get steeper.
Learning Objectives
- Gain insight into the notion of diminishing marginal returns and its ramifications for production output.
- Review the influence of burgeoning and waning marginal returns on marginal cost.