If MPP declines with greater output,then MC must increase.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decline. This means that as output increases, the marginal cost of producing each additional unit of output also increases, as it requires more and more of the variable input to produce each unit. Therefore, if MPP (marginal physical product) declines with greater output, MC (marginal cost) must increase.

If MPP Declines with Greater Output,then MC Must Increase