Diseconomies of scale
A)exist when fixed cost increases as output increases.
B)exist when long-run average cost increases as output increases.
C)result eventually as the firm uses more and more labor with a fixed capital stock.
D)both a and b
E)all of the above

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when the long-run average cost of a firm increases as its output increases. This is typically due to inefficiencies that arise from managing a larger operation, such as coordination and communication problems.

Diseconomies of Scale