As output increases, diseconomies of scale
A)lead to rising long-run average costs
B)lead to declining long-run average costs
C)lead to rising short-run average total costs
D)lead to declining short-run total cost
E)means the law of diminishing marginal returns is affecting production

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm becomes too large and complex, making it difficult to manage efficiently. This can lead to higher costs in the long run, as the firm may need to hire more managers or implement more complex production processes. Therefore, as output increases, diseconomies of scale will lead to rising long-run average costs.

As Output Increases, Diseconomies of Scale