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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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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