Asked by Victoria Hines on Jul 22, 2024
Verified
In the short run,the average total cost curve slopes upward because of:
A) economies of scale.
B) diseconomies of scale.
C) increasing returns.
D) diminishing returns.
Average Total Cost
The total cost of production divided by the number of goods produced, representing the average cost per unit of output.
Diseconomies of Scale
A situation where as a firm grows larger, the costs per unit increase, due to factors like coordination and operational inefficiencies.
Diminishing Returns
A principle stating that adding more of one factor of production, while holding others constant, will at some point yield lower incremental per-unit returns.
- Distinguish and clarify the phenomenon of diminishing returns and how it affects cost curves.
- Acquire knowledge on the principles of economies and diseconomies of scale in the context of production costs.
Verified Answer
Learning Objectives
- Distinguish and clarify the phenomenon of diminishing returns and how it affects cost curves.
- Acquire knowledge on the principles of economies and diseconomies of scale in the context of production costs.
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