Diminishing marginal product explains why, as a firm's...

Name: Problem 2, Chapter 13: Principles of Microeconomics
Uploaded: 2023-09-08T17:06:33-08:00
Duration: 1 min 11 s
Channel: Anand Jangid
Description: Diminishing marginal product explains why, as a firm's output increases, a. the production function and total-cost curve both get steeper. b. the production function and total-cost curve both get flatter. c. the production function gets steeper, while the total-cost curve gets flatter. d. the production function gets flatter, while the total-cost curve gets steeper.

Diminishing marginal product explains why, as a firm's output increases, a. the production function and total-cost curve both get steeper. b. the production function and total-cost curve both get flatter. c. the production function gets steeper, while the total-cost curve gets flatter. d. the production function gets flatter, while the total-cost curve gets steeper.

Diminishing marginal product explains why, as a
firm's output increases,
a. the production function and total-cost curve both
get steeper.
b. the production function and total-cost curve both
get flatter.
c. the production function gets steeper, while the
total-cost curve gets flatter.
d. the production function gets flatter, while the
total-cost curve gets steeper.

Key Concepts

Marginal Cost

Marginal cost is the cost of producing one additional unit of output. With diminishing marginal product, marginal costs increase because additional units require proportionally more input resources, reflecting the rising cost per unit as output expands.

Production Function

The production function shows the relationship between inputs used in production and the resulting output. When diminishing marginal product is in effect, the incremental gains in output decrease with increased use of inputs, making the function flatter in regions of high production.

Total-Cost Curve

The total-cost curve represents the overall cost of production at different levels of output. As diminishing marginal returns cause the production function to flatten, the cost of producing each additional unit increases, which in economic terms means the total-cost curve gets steeper.

Marginal Product

Marginal product is the additional output produced by employing one more unit of an input. As a firm increases production and experiences diminishing marginal returns, each new unit of input contributes less to total output, leading to a flattening of the production function.

Diminishing Marginal Returns

This concept refers to the principle that adding more of a variable input, while holding other inputs constant, will eventually result in smaller increases in output. It is fundamental to understanding why productivity gains taper off as production scales up.

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