Why is the supply curve upward sloping because of marginal cost?

Economics Dec 10, 2020

Expert Solution

The supply curve slopes upwards in order to cover a higher marginal cost of production as it increases.

The higher marginal cost of production arises due to the diminishing marginal returns. In other words, once suppliers have produced a certain amount of goods or services, it is not as valuable to continue to produce above that since there is less demand for it.

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