Asked by Mollie Weber on May 07, 2024
Verified
Refer to Table 13-11. Which firm is experiencing diseconomies of scale?
A) Firm A only
B) Firm B only
C) Firm C only
D) Firm A and Firm B only
Diseconomies of Scale
The phenomenon where production costs per unit increase as a firm's output expands, often due to inefficiencies that arise from becoming too large.
- Attain insight into the ideas of economies of scale, diseconomies of scale, and constant returns to scale.
- Interpret visual representations and tables to gauge a company's cost fluctuations across varied output volumes.
Verified Answer
KV
Kendra VictoriaMay 14, 2024
Final Answer :
C
Explanation :
Firm C is experiencing diseconomies of scale because as its output increases, its long-run average total cost (LRATC) also increases, indicating that it is becoming less efficient as it expands.
Learning Objectives
- Attain insight into the ideas of economies of scale, diseconomies of scale, and constant returns to scale.
- Interpret visual representations and tables to gauge a company's cost fluctuations across varied output volumes.