Question

In problems where the objective is to minimize the total cost of the activities, an activity is said to have decreasing marginal returns if the slope of its cost graph never increases but sometimes decreases as the level of the activity increases. true or False

Answer 1

An activity is said to have decreasing marginal returns if the slope of its cost graph never increases but sometimes decreases as the level of the activity increases. The statement is true.

Step-by-step explanation:

The statement is true.

An activity is said to have decreasing marginal returns if the slope of its cost graph never increases but sometimes decreases as the level of the activity increases. This means that as you increase the level of the activity, the cost per unit decreases or remains the same, indicating diminishing marginal costs.

For example, if a company is producing widgets and the cost per widget decreases as they produce more widgets, it would demonstrate decreasing marginal returns.