Which of the following best describes the typical graphical portrayal of marginal cost in microeconomics?

• A. An upward-sloping curve that initially decreases and then increases
• B. A downward-sloping curve throughout
• C. A vertical straight line
• D. A horizontal straight line

Answer: (A)

Verified step by step guidance

1. Understand that marginal cost (MC) represents the additional cost incurred by producing one more unit of a good or service.
2. Recall that the typical shape of the marginal cost curve is influenced by the law of diminishing marginal returns, which causes the cost of producing additional units to eventually increase after a certain point.
3. Recognize that initially, marginal cost may decrease due to increasing efficiency or economies of scale, which means the curve slopes downward at first.
4. After reaching a minimum point, marginal cost starts to increase as diminishing returns set in, causing the curve to slope upward.
5. Therefore, the typical graphical portrayal of marginal cost is a curve that first decreases and then increases, forming a U-shaped or upward-sloping curve after the initial decline.