Asked by Daniel Amoako on Jul 12, 2024

verifed

Verified

​The marginal cost curve:

A) ​Usually declines initially as output increases and then rises with further increases in output
B) Is equal to the average variable cost curve
C) Usually rises initially as output increases and declines with further increases in output
D) ​Is always constant

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good changes as production levels vary.

Output

The quantity of goods or services produced by a business, industry, or economy.

  • Explain the connection between marginal cost and average cost, and its significance in understanding cost behavior.
verifed

Verified Answer

AD
Allyssa DaytonJul 17, 2024
Final Answer :
A
Explanation :
The marginal cost curve usually declines initially as output increases due to economies of scale, but eventually rises with further increases in output due to diseconomies of scale. This is because initially, as output increases, fixed costs are spread over a larger amount of output, reducing the marginal cost. However, at a certain point, additional units of output require more resources and costs, leading to an increase in marginal cost.