When the long-run average total cost curve is upward sloping as output increases,the firm has diseconomies of scale.

Question

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When the long-run average total cost curve is upward sloping, it means that as output increases, the firm is experiencing higher average total costs. This indicates that the firm is facing diseconomies of scale, which occur when an increase in output leads to higher per-unit costs.

When the Long-Run Average Total Cost Curve Is Upward Sloping