The long-run average cost of producing 12 units of output is $54; the long-run average cost of producing 13 units is $56. These numbers illustrate:
A) economies of scale.
B) diseconomies of scale.
C) economies of scope.
D) diminishing marginal productivity.

Question

Quizplus · Accepted Answer

The increase in the long-run average cost from $54 to $56 as output increases from 12 to 13 units indicates diseconomies of scale, where costs per unit increase with increased production.

The Long-Run Average Cost of Producing 12 Units of Output