If a firm is experiencing diseconomies of scale, its long-run marginal cost curve is upward sloping.

Question

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Diseconomies of scale occur when a firm's production becomes inefficient as it grows larger. This can be due to factors such as communication problems, increased bureaucracy, or specialization limitations. As a result, the firm's long-run marginal cost curve is upward sloping, indicating that the cost of producing each additional unit increases as the firm expands.

If a Firm Is Experiencing Diseconomies of Scale, Its Long-Run