Why do marginal costs first fall and then begin to rise?
Marginal cost arises when from producing an additional unit of output.Why are marginal costs important to a firm when making decisions to increase or decrease production?
It can be important to firms when deciding whether or not to hire employee. Businesses weigh the benefit of the added employee against the cost of paying them.How can you apply these cost concepts to your own life?
It can be applied to me when I eat cake for dessert. The more I eat, the lower the marginal benefit because I'm not as hungry anymore. Continuing to eat the cake, the marginal cost increases because I'm not getting as much from it as I was earlier, because I'm not hungry anymore.
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