ABSTRACT
According to the "law of increasing marginal costs", the marginal cost, i.e. the cost of producing the last unit, rises with the level of output obtained from a given capital equipment. This law will appear to many readers not too plausible and rightly so: whereas in agriculture a disproportionately higher input of fertilizers and labour is required in order to increase the yield, in an industrial establishment the marginal cost starts to rise spectacularly only when maximum utilization of equipment is approached, -which happens to be rather an exception.
