The short run marginal cost curve is ___shaped.

Options

A. U
B. V
C. X
D. W

Answer

B

Explanation

A short-run marginal cost curve graphically represent the relation between marginal (i.e., Incremental) cost Incurred by a firm in the short-run production of a good or service and the quantity of output produced. It is usually U-shaped.
This U shape is directly attributable to increasing, then decreasing marginal retums (and the law of diminishing marginal returns). As marginal product (and marginal retums) Increases for relattvely small output quantities, marginal cost declines. Then as marginal product and marginal retums) decreases with the law of diminishing marginal returns for relatively large output quantities, marginal cost increases.