The Law of Diminishing Marginal Returns

question 188

Multiple Choice

The law of diminishing marginal returns

• A) explains why the average total cost and marginal cost curves are U-shaped in the short run.
• B) explains why the average total cost, average fixed cost and the marginal cost curves are U-shaped in the short run.
• C) causes average total costs to rise at a decreasing rate as output increases.
• D) causes the difference between average total cost and average variable cost to get smaller as output increases.