Which of the Following Explains Most Accurately Why the Firm's

question 93

Multiple Choice

Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?

• A) As more of the variable factor is used, the higher the price of that factor.
• B) When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.
• C) As the variable factor is used more intensely, its marginal product will rise, causing an increase in marginal costs.
• D) As the size of the firm increases, the operational efficiency of the firm declines, causing an increase in marginal costs.

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