Asked by NOYAN ALI.K on Jun 26, 2024
Verified
A firm will begin to experience diminishing returns at the point where
A) marginal cost increases.
B) marginal cost decreases.
C) marginal product increases.
D) Both B and C are correct.
Marginal Cost
The additional cost incurred from producing one more unit of a good or service.
Diminishing Returns
A principle stating that as more of a variable input is added to fixed inputs, the additional output gained from each new unit of input eventually decreases.
Marginal Product
The additional output that can be produced by adding one more unit of a specific input, ceteris paribus.
- Gain an understanding of marginal cost concepts and their relevance to making production decisions.
- Comprehend how production scale influences cost frameworks and the principle of diminishing returns.
Verified Answer
Learning Objectives
- Gain an understanding of marginal cost concepts and their relevance to making production decisions.
- Comprehend how production scale influences cost frameworks and the principle of diminishing returns.
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