The marginal cost curve slopes downward at low outputs because of ________.The marginal cost curve eventually slopes upward because of ________.
A)greater specialization and division of labour;the law of diminishing returns
B)the law of diminishing returns;increasing average fixed cost
C)falling average fixed cost;the law of diminishing returns
D)the law of diminishing returns;greater specialization and division of labour
E)greater specialization and division of labour;rising average fixed cost

Question

Quizplus · Accepted Answer

At low outputs, greater specialization and division of labour can lead to efficiencies that reduce the cost of producing each additional unit, causing the marginal cost curve to slope downward. As production increases, the law of diminishing returns kicks in, meaning that adding more of one factor of production (while holding others constant) leads to smaller increases in output, causing the marginal cost of production to rise.

The Marginal Cost Curve Slopes Downward at Low Outputs Because