Economics · Production and Cost
When the law of diminishing returns operates in production, an increase in output leads to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A decrease in marginal cost and an increase in average cost
- 2An increase in marginal cost and a decrease in average cost
- 3A decrease in both marginal cost and average cost
- 4An increase in both marginal cost and average cost✓
Correct answer
An increase in both marginal cost and average cost
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