Writing at least two paragraphs why is the marginal cost ush

Writing at least two paragraphs, why is the marginal cost u-shaped in the short run?

Solution

In short run, quantity of one or more factors of production is fixed;like capital is fixed in short run.A firm\'s total cost is cost of all factors of production used in production.Marginal cost is one unit increase in total cost resulting form one unit increase in total product.Due to Law of diminishing returns, MC curve is U shaped.Since capital is fixed in short run,so increasing workers after a certain point leads to decrease in productivity.Hence, as number of workers rises, after a certain point,MC rises.MC is initially high at lower levels of output,then as output rises it falls reaching its minimum value,then rises again.

According to law of diminishing returs,as firm adds more units of variable input to fixed input,after some point,marginal productivity of variable input diminishes.U shaped MC curve reflect this law of diminishing returns.

Hence MC is u shaped in short run.