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I've graded the online quiz on Production Costs. In case you wanted to know the answers before Thursday's midterm, here are the points I was look for. There are a handful of students who have not taken the quiz, so I'd ask you not to share this information with them until they are done. Question: Use the concepts in the Law of Diminishing Marginal Returns to explain the shape of the typical average variable cost curve. Answer: the Law of Diminishing Returns shows that as you keep some inputs fixed and add more of another input, like labor, the marginal product goes up, but then starts to go down.
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