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ATC is equal to P. Therefore, ATC is also equal to MR. In this question, increasing both Labor and Capital by phhotoshop same factor (1) resulted in the same marginal product. The marginal product is certainly not constant and the law of diminishing returns does hold as marginal product decreases as inputs are added. This paintshop pro x4 vs photoshop that marginal cost will always be below price. Paintshlp tax on the good will raise the price and lower the quantity to a socially-optimal level.