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Pearson Edexcel IAL Economics 3.3.2.2b law of diminishing returns

Practise recognising diminishing returns in cost tables and diagrams and linking it to rising marginal cost in the short run.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
A2

Exam points

  • identify where diminishing returns begin from a total cost table in context
  • explain why a short-run MC curve slopes upwards after diminishing returns set in

3.3.2.2b - law of diminishing returns question 1

[Maximum number: 1]

The diagram shows a short-run marginal cost curve for a small café in Thailand.

Figure for Question 3.3.2.2b - law of diminishing returns question 1 — Edexcel A-Level Economics A2

Which one of the following is the reason why the MC curve slopes upwards from point X to point Y ?

A

Decreasing returns to scale

B

Increasing fixed costs

C

Diminishing returns

D

Diseconomies of scale

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