Asked by blahh parker on May 11, 2024
Verified
A firm's long-run average total costs increase as it produces more output.This firm has:
A) economies of scale.
B) constant returns to scale.
C) diseconomies of scale.
D) a spreading effect.
Diseconomies of Scale
The phenomenon where production costs per unit increase as a firm or industry's output expands.
Output
The amount of something produced by a person, machine, or industry.
- Comprehend the principles of economies and diseconomies of scale and how they interact with the cost curves.
Verified Answer
KC
Kathy CabreraMay 14, 2024
Final Answer :
C
Explanation :
When a firm's long-run average total costs increase as it produces more output, it indicates that the firm is experiencing diseconomies of scale. This is because the firm is facing higher production costs per unit of output as it expands its scale of production.
Learning Objectives
- Comprehend the principles of economies and diseconomies of scale and how they interact with the cost curves.