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Artyom0805 [142]
3 years ago
11

What is marginal cost, and how does it affect supply decisions?

Geography
2 answers:
maks197457 [2]3 years ago
6 0
Firms need to sell their extra output at a higher price so that they can pay the higher marginal cost of production. Hence, decisions to supply are largely determined by the marginal cost of production. The supply curve slopes upward, reflecting the higher price needed to cover the higher marginal cost of production.
Jet001 [13]3 years ago
4 0

Answer:Here is your answer-

Firms need to sell their extra output at a higher price so that they can pay the higher marginal cost of production. Hence, decisions to supply are largely determined by the marginal cost of production. The supply curve slopes upward, reflecting the higher price needed to cover the higher marginal cost of production.

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