The Fundamental Reason That Marginal Cost Eventually Rises as Output

question 157

Multiple Choice

The fundamental reason that marginal cost eventually rises as output increases is because of

• A)economies of scale.
• B)diseconomies of scale.
• C)diminishing marginal product.
• D)rising average fixed cost.

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Definitions:

Shortages

A situation where the demand for a product or service exceeds the supply available at a specific price.

Price Floor

A government- or authority-imposed minimum price set above the equilibrium price, preventing sellers from trading at lower prices.

Surplus

An excess of something, often used in economic contexts to describe a situation in which supply exceeds demand.

Shortage

A situation where the demand for a product exceeds its supply at the current price, leading to a scarcity of the product in the market.