Why is the short run marginal cost curve ‘U’-shaped?

The short run marginal cost curve is ‘U’ shaped because initially the marginal cost falls but ultimately it rises. It is based upon the law of variable proportions.

Let's understand it with help of graph –


Cost Schedule


Output



TC



SMC



1



10



10



2



19



9



3



27



8



4



35



8



5



44



9



6



54



10



7



65



11



8



77



12



GRAPH



20