If unit costs increase as the quantity of production increases and all inputs are variable, then a firm is experiencing

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Quizplus · Accepted Answer

If unit costs increase as the quantity of production increases, this indicates that the firm is experiencing diseconomies of scale. This could be due to difficulties in coordinating and managing a larger production process, increasing costs of raw materials, or other factors that lead to diminishing returns as production increases.

If Unit Costs Increase as the Quantity of Production Increases