If an increase in production increases your firm's short-run average total? cost, your firm is...
Question:
If an increase in production increases your firm's short-run average total? cost, your firm is likely experiencing _____ and should consider _____ output levels.
A. economies of scale; expanding
B. diseconomies of scale; expanding
C. diseconomies of scale; contracting
D. economies of scale; contracting
Average Total Cost:
The average total cost is the total cost per unit of output. ATC initially decreases as the output increases, reaches its minimum, and later, it starts increases as the output increases further. So, it attains a U-shape when represented graphically.
Answer and Explanation: 1
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View this answerThe correct option is (c).
If an increase in production increases your firm's short-run average total cost, your firm is likely experiencing disecono...
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Average Total Cost: Definition & Formula
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Chapter 3 / Lesson 23
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Learn what is the average total cost. Learn its use, its formula, and how to apply it.
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