● The short-run marginal cost curve is u shaped due to the operation of the returns to factor input.
● At the initial stages, units of the variable factor are employed along with a unit of the fixed factor which yields increasing returns.
● This will reduce the marginal cost and push the curve down.
● The addition of more variable factors may lead to diminishing returns.
● This will increase the marginal cost after reaching its minimum level.
● The marginal cost curve falls to its minimum level and then Rises.
● This is the reason that the short-run marginal curve is u shaped.
The supply refers to the different quantity of A commodity that a producer is willing to sell at different prices.
The quantity supplied refers to the quantity of the commodity that a seller is willing to sell at a given price.
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