When AVC eventually increases as output increases, this is referred to as the effect.
A)diminishing returns
B)spreading
C)constant cost
D)increasing returns

Question

Quizplus · Accepted Answer

Diminishing returns occur when additional units of input result in decreasing marginal product, causing AVC to increase as output increases. The increase in AVC is due to the additional cost of adding more units of input, which eventually reduces the efficiency of production.

When AVC Eventually Increases as Output Increases, This Is Referred