n the short run when some inputs are fixed, marginal cost must eventually rise as a firm's output increases because A. there will eventually be decreasing returns to scale. B. there will eventually be diminishing marginal products for the firm's variable inputs. C. the prices the firm pays for labor, material and other variable inputs will increase. D. All of the above.

Question

Business

Litzy Mcmahon

18 December, 15:27

n the short run when some inputs are fixed, marginal cost must eventually rise as a firm's output increases because A. there will eventually be decreasing returns to scale. B. there will eventually be diminishing marginal products for the firm's variable inputs. C. the prices the firm pays for labor, material and other variable inputs will increase. D. All of the above.

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Isai Krueger · Answer 1

C. the prices the firm pays for labor, material and other variable inputs will increase.

Explanation:

Marginal cost, also called an incremental cost. It is the extra cost of increasing output by one more unit of variables (capital or labour in production).

Marginal cost is the cost difference in producing an additional unit of an enterprise's output. For example, if the cost of producing 20 carton of cheese is $5 and it cost $6 to produce 21 carton of the same cheese, the $1 difrerence in cost is known S Marginal Cost

It is illustrated as below

MC = Changes in Total Cost / Changes in output

Where Total cost is the total price of product produced