According to the law of _____ , producing significantly more of a product than current levels will come at a higher cost, so the price of the good must rise for sellers to be willing and able to increase the quantity of the good they supply to the market.Multiple choice question.increasing opportunity costsdemanddiminishing marginal productivityaverages
Question
According to the law of _____ , producing significantly more of a product than current levels will come at a higher cost, so the price of the good must rise for sellers to be willing and able to increase the quantity of the good they supply to the market.Multiple choice question.increasing opportunity costsdemanddiminishing marginal productivityaverages
Solution
The correct answer is "law of increasing opportunity costs". This law states that as the production of a particular good increases, the opportunity cost of producing an additional unit rises. This is because resources are not perfectly adaptable to the production of all goods. So, when they are reallocated from the production of one good to another, they become less and less efficient, hence the increase in cost.
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