When there are diseconomies of scale in production, what can we conclude?
A) Average fixed cost increases as output expands.
B) Marginal cost decreases as output expands.
C) Long-run average total cost declines as output expands.
D) Long-run average total cost increases as output expands.

Question

Quizplus · Accepted Answer

Diseconomies of scale mean that as output expands, long-run average total cost increases. This is because factors of production become less efficient as the scale of production increases, leading to higher costs per unit of output.

When There Are Diseconomies of Scale in Production, What Can