Figure 13-5
This figure depicts average total cost functions for a firm that produces automobiles.

-Refer to Figure 13-5.At what output levels does this firm experience diseconomies of scale
A)output levels below M
B)output levels between M and N
C)output levels at N
D)output levels above N

Question

Figure 13-5
This figure depicts average total cost functions for a firm that produces automobiles.
 
-Refer to Figure 13-5.At what output levels does this firm experience diseconomies of scale
A)output levels below M 
B)output levels between M and N 
C)output levels at N 
D)output levels above N

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm's average costs increase as output increases. This typically happens at higher levels of production, beyond the point where the firm has exhausted its efficiencies, which is usually above point N in the context of the figure.

Figure 13-5 This Figure Depicts Average Total Cost Functions for a Firm