As Output Increases, Marginal Cost Will Eventually

question 40

Multiple Choice

As output increases, marginal cost will eventually

• A) decrease because of the law of diminishing returns.
• B) increase because of the law of increasing returns.
• C) increase because of the law of diminishing returns.
• D) decrease because of the law of increasing returns.

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Definitions:

Private Decisions

Choices made by individuals or businesses in the private sector, typically regarding consumption, investment, or production.

Efficiency

The effectiveness with which resources are used to achieve a desired outcome, maximizing outputs from given inputs without waste.

Transferable Rights

Rights that can be assigned or transferred from one party to another.

Pollution

The presence or introduction into the environment of contaminants that cause harm or discomfort to organisms and the environment.