Question

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be?

1) decreasing
2) increasing
3) constant
4) equal to average total cost

Answer 1

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be increasing.

Step-by-step explanation:

In the case of Marie Marionettes operating under conditions of diminishing marginal product, the marginal costs will be increasing.

Diminishing marginal product refers to the decreasing additional output that is gained when adding one more unit of input. This means that each additional unit of input will cost more, leading to an increase in marginal costs.

For example, as Marie Marionettes increases its production, it may initially experience increasing marginal product, resulting in decreasing marginal costs. However, as production continues, the marginal product will eventually start to decline, leading to increasing marginal costs.