Asked by Suzanna Mondragon on Jul 05, 2024
Verified
If the production function exhibits diminishing marginal product, the total cost function gets steeper as the quantity of output increases.
Diminishing Marginal Product
The principle that as the quantity of a factor of production increases, holding all other inputs constant, the additional output generated by one more unit of that factor will eventually decrease.
Total Cost Function
A mathematical relationship expressing the total cost of production as a function of the quantity of output.
- Master the nuances between marginal cost, average total cost, and marginal product as they apply to production and cost functions.
- Grasp the concept of diminishing marginal productivity and its impact on cost functions.
Verified Answer
SS
Sarah StewartJul 09, 2024
Final Answer :
True
Explanation :
When the production function exhibits diminishing marginal product, it means that as more units of a variable input are added, the additional output produced by each new unit of input decreases. This leads to an increase in the marginal cost of production as output increases, making the total cost function steeper.
Learning Objectives
- Master the nuances between marginal cost, average total cost, and marginal product as they apply to production and cost functions.
- Grasp the concept of diminishing marginal productivity and its impact on cost functions.