Diseconomies of scale are pictured on a graph by the upward-sloping portion of the
A)marginal product curve
B)short-run marginal cost curve
C)long-run marginal cost curve
D)short-run average cost curve
E)long-run average cost curve

Question

Quizplus · Accepted Answer

The long-run average cost curve shows the lowest average cost per unit that a firm can achieve with any given level of production. As production increases beyond this point, the long-run average cost curve begins to slope upwards, indicating diseconomies of scale. This occurs because the increased size of the firm can lead to difficulties in managing and coordinating operations, as well as increased bureaucracy, which can lead to higher costs per unit of output.

Diseconomies of Scale Are Pictured on a Graph by the Upward-Sloping