Question

In: Economics

When the short-run marginal cost curve is upward-sloping, Multiple Choice Diminishing returns occurs with greater output....

When the short-run marginal cost curve is upward-sloping,

Multiple Choice

  • Diminishing returns occurs with greater output.

  • There are diseconomies of scale.

  • The average total cost curve is upward-sloping.

  • The average total cost curve is above the marginal cost curve.

Solutions

Expert Solution

When the marginal cost curve is upward-sloping in the graph which contains the cost and units, the marginal cost is increasing. So, when the marginal cost is higher, the output reduces for the given input or cost. In this case, the output reduces when the output quantity is greater or marginal cost increases with greater output.

Answer: Diminishing returns occur with greater output


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