If production in the short run is characterized by diminishing returns, then which of the following must be true? The average variable cost is increasing, and the average total cost is increasing. The marginal cost is decreasing, and the average total cost is increasing. The marginal cost in increasing, and the average fixed cost is decreasing. The marginal product is increasing, and the average product is decreasing. The marginal product is increasing, and the average total cost is decreasing.
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Step 1: In the short run, diminishing returns means that as more units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal product of the variable input decreases. Show more…
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