The marginal cost curve is upward sloping because resources are not all equally productive in all activities.
Diminishing marginal returns refers to the decrease in additional output obtained from each additional unit of input, as the amount of input increases.
As a firm expands its production, it relies more on less efficient and productive resources, leading to a decline in the marginal output from each additional unit of input. This, in turn, causes the marginal cost curve to rise.
The statement acknowledges the role of resource specificity in influencing marginal costs but do not recognize the fundamental concept of diminishing marginal returns, which is the primary driver of upward-sloping marginal cost curves.
complete question: The marginal cost of producing the 3 millionth hot tub is 9 swimming pools. why is the marginal cost curve is upward sloping?