Use the table below to answer the following questions.
Table 10.4.1
Swanky's output levels
-Refer to Table 10.4.1,which represents Swanky's production possibilities as the firm varies the quantities of knitting machines and workers per day.If Swanky increases the number of knitting machines from 2 to 3 and increases the number of workers employed from 2 to 3,the factory experiences
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)constant marginal product.
E)minimum efficient scale.

Question

Use the table below to answer the following questions.
Table 10.4.1
Swanky's output levels 
-Refer to Table 10.4.1,which represents Swanky's production possibilities as the firm varies the quantities of knitting machines and workers per day.If Swanky increases the number of knitting machines from 2 to 3 and increases the number of workers employed from 2 to 3,the factory experiences
A)economies of scale. 
B)constant returns to scale. 
C)diseconomies of scale. 
D)constant marginal product. 
E)minimum efficient scale.

Quizplus · Accepted Answer

The total output of the firm decreases from 100 to 95 as it increases the number of machines and workers. This indicates that the firm is experiencing diseconomies of scale, which occurs when increasing the scale of production leads to a decrease in efficiency and productivity. Thus, the best choice is C.

Use the Table Below to Answer the Following Questions