When marginal cost is increasing, how does this impact the overall profitability of the business?

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1266007

2026-03-11 16:50

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When marginal cost is increasing, it can impact the overall profitability of the business by reducing the profit margin. This is because as the cost of producing each additional unit rises, the profit earned from selling that unit may not be enough to cover the increased cost. As a result, the business may experience lower profits or even losses if the marginal cost continues to rise.

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