A firm's long-run average total costs increase as it produces more output.This firm has:
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)a spreading effect.

Question

Quizplus · Accepted Answer

When a firm's long-run average total costs increase as it produces more output, it indicates that the firm is experiencing diseconomies of scale. This is because the firm is facing higher production costs per unit of output as it expands its scale of production.

A Firm's Long-Run Average Total Costs Increase as It Produces