Marginal product and diminishing returns

The marginal product curve peaks and diminishing marginal returns begin--there is still a return for the additional input (labor) but it is less than the previous inputs addition to the FIXED workplace. 

The marginal cost curve hits a minimum as the cost of the additional input decreases.  After MC hits the minimum MC rises because the cost to employ the resource increases and the marginal product is increasing at a diminished rate. 

DMR is shown on the MC curve at lowest point of the curve.



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