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

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when long-run average total costs rise as output increases. This is because as a firm grows, it may become more difficult to manage, coordinate, and control all aspects of the business, leading to higher costs per unit of output.

When Do Diseconomies of Scale Occur