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

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when the long-run average total costs rise as output increases. This can happen due to factors such as increased bureaucracy, coordination problems, and difficulty in managing larger teams or facilities. As output increases beyond a certain point, these factors can lead to higher costs and lower efficiency, resulting in diseconomies of scale.

Diseconomies of Scale Occur When