If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will ?
Correct answer: D. be U-shaped.
- A. be flat (horizontal)
- B. slope upward
- C. slope downward
- D. be U-shaped.
Explanation
Marginal cost moves inversely with marginal product: rising marginal product makes marginal cost fall, while diminishing marginal product makes it rise. Therefore, the marginal-cost curve is U-shaped.
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