Why is the marginal cost curve shaped the way it is?

First of all let’s define Marginal Cost:-It is the cost to a firm to produce one additional unit of output e.g. the cost of Volkswagen to produce an extra carInitially due to the law of increasing marginal returns (extra unit of input produces a more than proportional amount of output) the MC curve dips. However, due to the constraints of a fixed factor input, such as land, additional inputs produce a less than proportional amount of output (decreasing marginal returns) the cost of producing one additional unit rises and hence then MC curve rises.

MH
Answered by Morgan H. Economics tutor

7817 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Please can you explain the labour market?


How should the UK government go about achieving a balance of payments surplus?


Evaluate the impact of the introduction of a sugar tax on fizzy drinks in the UK.


What is a public good?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences