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Figure 7.13
-(Figure 7.13) _____ of scale occur between _____ units of output.

Question

Use the following to answer question:
Figure 7.13 
-(Figure 7.13) _____ of scale occur between _____ units of output.

Quizplus · Accepted Answer

Figure 7.13 shows an upward-sloping long-run average cost curve with a point of minimum cost at output level 5. As output level increases beyond 5, the curve begins to slope upward, indicating that firms are experiencing diseconomies of scale. This trend continues until output level 9, where the curve reaches its maximum point, signaling the existence of high levels of inefficiency and large proportions of idle capacity. Therefore, diseconomies of scale occur between 5 and 9 units of output making choice C the correct answer.

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