Marginal Product and Marginal Cost Review

The video explains why the marginal cost curve is U-shaped, focusing on the law of diminishing marginal returns. It discusses how marginal cost decreases as marginal product increases due to specialization, and increases when marginal product decreases. A numerical example is provided to illustrate these concepts, showing how changes in labor affect total and marginal costs.

What is the shape of the marginal cost curve and why does it change?

Explain the law of diminishing marginal returns in your own words.

How does the marginal product of labor affect marginal cost?

Describe the relationship between marginal cost and marginal product as more workers are hired.

What happens to marginal cost when the marginal product starts to fall?