Diseconomies of scale occur when
A)average fixed costs are falling.
B)average fixed costs are constant.
C)long-run average total costs rise as output increases.
D)long-run average total costs fall as output increases.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when long-run average total costs rise as output increases. This can happen due to various reasons such as the difficulty in managing a large organization, decreased employee morale in a large workforce, or the cost of coordinating and communicating across various departments.

Diseconomies of Scale Occur When