When a firm's AC eventually starts to rise, it is often because
A)executive salaries rise sharply as output rises.
B)the ability to manage larger and larger levels of output results in much higher administrative costs.
C)marginal cost increases rapidly at higher output levels.
D)firm output has started to decline.

Question

Quizplus · Accepted Answer

As a firm expands, it may experience diseconomies of scale, where increased complexity and coordination costs lead to higher average costs.

When a Firm's AC Eventually Starts to Rise, It Is