97.5k views
1 vote
If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:

a) Constant
b) Increasing
c) Decreasing
d) Zero

User Sharina
by
8.3k points

1 Answer

2 votes

Final answer:

When a firm operates under conditions of diminishing marginal product, the marginal costs will be increasing.

Step-by-step explanation:

In economics, when a firm operates under conditions of diminishing marginal product, marginal costs will be increasing. Diminishing marginal product means that as the input of resources (such as labor or capital) increases, the additional output generated by each additional unit of input decreases. As a result, the firm needs to spend more resources to produce the same amount of additional output, leading to increasing marginal costs. For example, if Marie Marionettes hires additional workers but experiences diminishing returns in terms of the number of dolls produced, their costs per additional doll will increase.

User Barrylachapelle
by
7.6k points