Question

Which is accurate regarding marginal cost? Group of answer choices It is equal to ATC for...

Which is accurate regarding marginal cost?

Group of answer choices

It is equal to ATC for the first unit produced

It falls in the range of output where diminishing returns to labor occur

it is falling as Q begins to rise (in the MC diagram) because the marginal product is rising from division of labor benefits

it is shown in a diagram with labor on the horizontal axis

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Answer #1

Option 3

it is falling as Q begins to rise because the marginal product is rising from division of labor benefits.

Due to fixed costs, marginal cost always starts below the average total cost. So, it is not equal to ATC at the first unit.

​​​​​​In initial stages, the marginal productivity of labor is increasing. So, the cost required to produce one additional unit falls in initial stages. So, marginal cost is falling initially. Then it starts to rise as the marginal productivity of labor starts to fall.

So, the answer is option 3.

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