Short- run cost curves for a firm are eventually upward- sloping because of the effects of
A)diminishing marginal product.
B)increasing fixed costs.
C)decreasing total product.
D)increasing marginal productivity of the variable inputs.
E)the increasing price of variable inputs.

Question

Quizplus · Accepted Answer

In the short run, a firm's fixed costs are fixed, so any increased production beyond a certain point will result in diminishing marginal product. This means that each additional unit of variable input (such as labor) will result in a smaller increase in output, which leads to higher marginal costs and eventually upward-sloping cost curves.

Short- Run Cost Curves for a Firm Are Eventually Upward-