Diminishing marginal product leads to rising marginal costs for a seller.
Diminishing marginal product is an economic terms which states that says as more units of a variable input is added to a fixed factor used in production, output might increase initially but after a point total output would increase at a decreasing rate and marginal product would begin to decrease.
For example, assume that there is 1 worker who produces 10 units of output. When workers are increased to 2, output increases to 25 and marginal output is 15. When workers are increased to 3, output becomes 35 and marginal output is 10. When workers are increased to 4, output increases to 43 and marginal product is 8.
From the above question, diminishing marginal product begins to set in from the third worker.
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