Asked by Clarise Gindap on May 28, 2024
Verified
A firm will ________ at the output where marginal cost increases
A) begin to experience diminishing returns
B) begin to experience increasing returns
C) become profitable
D) start to experience losses
Marginal Cost
The increase in total cost that arises from an extra unit of production, pivotal for decision-making in production processes.
Diminishing Returns
A principle stating that as more of a variable input is combined with a fixed input, the incremental gains in output will eventually decrease.
Increasing Returns
This refers to a scenario in economics where, as the quantity of input increases, the rate of output increases at a faster rate, leading to economies of scale.
- Exercise the concept of marginal costs to shape decisions in business production practices.
- Understand how the law of diminishing marginal returns affects production costs.
Verified Answer
Learning Objectives
- Exercise the concept of marginal costs to shape decisions in business production practices.
- Understand how the law of diminishing marginal returns affects production costs.
Related questions
If We Assume That Labor Is the Only Variable Input ...
If Capital Is a Variable Input in Production, the Law ...
At the Point Where Total Product Is ________, Marginal Product ...
(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels ...
(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels ...