Suppose that a firm's long-run average total costs of producing small commuter jet airplanes increases as it produces between 2,000 and 4,000 airplanes. For this range of output, the firm is experiencing
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)specialization.

Question

Quizplus · Accepted Answer

The firm is experiencing diseconomies of scale since its long-run average total costs increase as it produces more output.

Suppose That a Firm's Long-Run Average Total Costs of Producing