Final answer:
Diminishing marginal product causes the variable cost curve to become steeper. It illustrates how each additional unit of input eventually contributes less to output, leading to higher costs for additional output.
Step-by-step explanation:
The concept of diminishing marginal product refers to a situation where, after a certain point, each additional unit of a variable input added to a fixed input produces smaller and smaller increases in output. This phenomenon is illustrated using an example of a farmer irrigating land. At first, adding water increases output significantly, but as more water is added, the increase in output diminishes, and can even lead to a reduction in output if the field is flooded.
This concept is vital when considering cost curves in the context of economics and production. Specifically, diminishing marginal product causes the variable cost curve to become steeper. This is because when the additional production brought by each new unit of input decreases, the cost of producing each extra unit of output (marginal cost) increases, which in turn makes the variable cost curve increase at an increasing rate.