Question

If a firm experiences productivity gains from employee specialization, its marginal cost_________.

A. increases at an increasing rate.
B. decreases at an increasing rate.
C. decreases at a decreasing rate.
D. decreases at a constant rate.
E. increases at a decreasing rate.

Answer 1

correct option is C. decreases at a decreasing rate.

Step-by-step explanation:

solution

when an organization gain productivity than its marginal cost will be decreases at a decreasing rate

as here when initial specialization of employee is lead to an significant reduction in the marginal costs though the more specialized people get

and less additional amount is save due to the specialization

so here correct option is C. decreases at a decreasing rate.