Marginal Costs. Discuss how the marginal cost declines as the marginal product of a variable input increases. Please integrate the Bible passages in your discussion.
Marginal cost is the cost for producing an extra or additional unit of product or output. Marginal cost and marginal product are inversely related to each other. As marginal product increases the marginal cost will decline and vice versa. The relationship between marginal cost and marginal product can be explain through the law of diminishing returns. This law states that, as one continue to add resources or input to production, the cost per unit will first decline. This happens due to economies of scale and law of diminishing return.
For example, There is a 1 machine which produces 10000 chocolates if we employ 10 labour to produce . The cost and number of machine will be fixed and variable input will increase When you employ one labour his/her productivity will be more and marginal cost of production will be less.The marginal cost will decline till 10000 chocolate's production and marginal product of a variable input increases.