How does the notion of diminishing marginal returns explain the upward slope?

Question

How does the notion of diminishing marginal returns explain the upward slope found in a typical marginal cost curve?

Answer 1

Here we have to remember some mathematical relations

.- marginal returns is given by dQ/dL

.- marginal costs is given by dC/dQ

a decrease in marginal returns (diminishing marginal returns) means a decrease in dQ in dQ/dL

A decrease in dQ means an increase in dC in dC/dQ (upward slope in marginal cost curve)

The notion implicit in this formulation say a reduction in productivity by WORKER make necessary to hire more WORKERS at time to increase the production in one unit. If I need more workers for produce i will need more money to pay it. This is reflected in marginal cost curve, it says for reach a more high levels of production it is necessary to expend more money in costs because the productivity by worker is less.

Example: with 140 workers you produce 34 units of production; at this level you need suppose 18 workers more to produce 35 units. When you reach 53 units you hire734 workers but for pass to 54th unit you will need 28 workers more; where 28 is more than 18, this is more money in wage and salaries, this is more costs.

Why in the level of production of 53 units I need more workers for produce an additional unit than in the level of 35 units? because in the level of 35 the workers have more productivity than in the 53th level.

Answer 2

The marginal cost curve describe the gradient of the total cost function. The upward sloping portion of the marginal cost curve may be interpreted as 'an increase in cost given an increase in output', which essentially defines why there is diminishing marginal return to scale. When marginal cost increase as output increase, intuitively, it would be more and more costly to produce an extra unit of output. Hence, there is deceasing return to scale in this case.