Multiple Choice
A firm is operating at a scale where diseconomies of scale are present. Which of the following could help explain what that means?
A) The firm is operating at a scale where the average total cost of production is falling as output expands.
B) The firm is operating at a scale where total fixed costs are not minimized.
C) The firm is operating at a scale where average total cost is constant as output expands.
D) The firm has grown so large that average total cost increases as output expands.
Correct Answer:
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