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Marginal costing and decision
Microsoft - increasing or diminishing returns?
Questions
Problem 1 Is it possible for a firm to experience both increasing and diminishing returns at the same time?
Problem 2 What other firms, in other industries, might be in similar situations to Microsoft, and in what respects?
Problem 3 What is the nature of the fixed factor that is causing the law of diminishing returns in Microsoft's case?
Problem 4 Are there any ways in which Microsoft can reduce the undesirable effects of the law of diminishing returns?
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