Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.
-Refer to Figure 13-9. At output levels greater than N, the firm experiences
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)minimum efficient scale.

Question

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9. At output levels greater than N, the firm experiences
A)economies of scale. 
B)constant returns to scale. 
C)diseconomies of scale. 
D)minimum efficient scale.

Quizplus · Accepted Answer

At output levels greater than N, the average total cost is increasing, indicating that the firm is experiencing diseconomies of scale. This means that as the firm increases its production beyond N, its cost per unit of output is increasing, which could be due to factors such as increased input costs or diminishing returns to scale.

Figure 13-9 the Figure Below Depicts Average Total Cost Functions for a for a Firm