If diseconomies of scale are present
A)average total cost is decreasing.
B)the long-run average cost curve has a negative slope.
C)economies of scale are also present.
D)the long-run average cost curve has a positive slope.
E)None of the above.

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to a situation where the firm's long-run average cost curve has a positive slope, indicating that as the firm increases its output, its average total cost per unit increases. Therefore, choice D is the correct answer. Option A is incorrect because diseconomies of scale refer to a situation where average total cost is increasing, not decreasing. Option B is incorrect because the long-run average cost curve has a positive slope, not a negative one. Option C is incorrect because diseconomies of scale and economies of scale refer to opposite phenomena, and they cannot coexist in the same production process.

If Diseconomies of Scale Are Present