If a firm encounters diseconomies of scale, we can be sure that a. marginal cost is greater than...
Question:
If a firm encounters diseconomies of scale, we can be sure that
a. marginal cost is greater than average cost.
b. marginal cost is rising.
c. marginal cost is less than average cost.
d. average cost falls as a function of output.
Economies and Diseconomies of Scale:
We say that a firm experiences economies of scale within a certain range of output when the average cost declines as the quantity of output increases. On the other hand, when the average cost increases as the quantity of output increases, then the firm experiences diseconomies of scale.
Answer and Explanation: 1
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View this answerOur goal is to determine which among the options correctly describes the costs of a firm experiencing diseconomies of scale.
Note that when a firm...
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Economies & Diseconomies of Scale
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Chapter 9 / Lesson 4
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Define economies of scale and diseconomies of scale. Compare economies of scale and diseconomies of scale using the graph and subsequent examples. Learn about the various causes of diseconomies of scale.
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