Diminishing marginal return implies ?
Correct answer: D. increasing marginal costs.
- A. decreasing average fixed costs.
- B. decreasing marginal costs.
- C. decreasing average variable costs.
- D. increasing marginal costs.
Explanation
With diminishing marginal returns, each additional unit of input produces less extra output. More input is consequently needed for each additional unit of output, causing marginal cost to rise.
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