Dollar Cost Marginal Cost 100 200 300 400 500 600 700 800 Output Which of the fo

Question

Dollar Cost Marginal Cost 100 200 300 400 500 600 700 800 Output Which of the following statements concerning the above diagram is TRUE? The marginal cost curve is falling below output levels of 300 because the law of diminishing retums has set in The marginal cost curve is falling below output levels of 300 because the marginal productivity of labor is decreasing and the marginal cost curve is rising above cutput levels above 300 because marginal productivity of labor is increasing The marginal cost curve is rising above output levels of 300 because average fixed cost is decreasing The marginal cost curve is falling below output levels of 300 because the marginal productivity of labor is increasing and the marginal cost curve is nising above output levels above 300 because marginal productivity of labor is decreasing The marginal cost curve is falling below output levels of 300 because average fixed cost is decreasing

Explanation / Answer

The marginal cost curve is falling below output levels of 300 because the marginal productivity of labor is increasing and the marginal cost curve is rising above output levels above 300 because marginal productivity of labor is decreasing. Hence, option(D) is correct.

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