Question

If marginal cost is rising, a. average fixed cost must be rising. b. marginal product must be falling. c. marginal product must be rising. d. average variable cost must be falling.

Answer 1

In a business, when the marginal cost is rising, it is most likely that b. marginal product must be falling.

What happens when marginal cost rises?

The marginal cost refers to the cost of producing an additional unit of a product.

When this cost begins to rise, it means that there are too many units involved in the production of goods with limited technology. This leads to marginal product falling even though total product is rising.

In conclusion, option B is correct.

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