A rising short-run average cost is a result of

Answer Details

A rising short-run average cost is a result of "diminishing returns". This means that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually start to decrease, leading to higher average costs. In other words, the cost per unit of output will increase as a result of adding more variable inputs. This is due to the fact that the fixed input (such as a factory) has a limited capacity to produce, and adding more variable inputs (such as labor or raw materials) beyond this capacity will not result in a proportional increase in output. As a result, the cost per unit of output will increase as production moves beyond the optimal level.