The Law of Diminishing Marginal Returns

question 360

Multiple Choice

The law of diminishing marginal returns

• A) results in average variable cost (AVC), average total cost (ATC), and marginal cost (MC) curves eventually increasing at an increasing rate.
• B) results in MC but not ATC curves eventually increasing at an increasing rate.
• C) causes average fixed costs to decline continuously as output increases.
• D) causes the difference between average total cost and average variable cost to shrink as output increases.

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