Explain why firms continue to produce additional goods even after Marginal Cost (MC) beg rise (at Q1) where diminishing returns set in? Shouldn't firms stop producing when MC is at minimum at Q1? (Graph is provided to help you visualize) Price 01 MC always intersects ATC of its minimum point Where diminishing returns set in and MC begins to increase. MC ATC MR-Price Quantity

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Explain why firms continue to produce additional goods even after Marginal Cost (MC) begins t
rise (at Q1) where diminishing returns set in?
Shouldn't firms stop producing when MC is at minimum at Q1?
(Graph is provided to help you visualize)
Price
01
MC always intersects
ATC at its minimum point
Where diminishing returns set in
and MC begins to increase.
MC
ATC
MR-Price
Quantity
Transcribed Image Text:Explain why firms continue to produce additional goods even after Marginal Cost (MC) begins t rise (at Q1) where diminishing returns set in? Shouldn't firms stop producing when MC is at minimum at Q1? (Graph is provided to help you visualize) Price 01 MC always intersects ATC at its minimum point Where diminishing returns set in and MC begins to increase. MC ATC MR-Price Quantity
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