-Refer to the diagram above.The firm is experiencing diseconomies of scale when output is
A) less than 18 units.
B) between 18 and 21 units.
C) greater than 21 units.
D) greater than 18 units.
E) less than 21 units.

Question

-Refer to the diagram above.The firm is experiencing diseconomies of scale when output is
A) less than 18 units. 
B) between 18 and 21 units. 
C) greater than 21 units. 
D) greater than 18 units. 
E) less than 21 units.

Quizplus · Accepted Answer

Diseconomies of scale occur when increasing production leads to higher average costs. This typically happens at higher levels of output, beyond the optimal scale, which in this case is indicated as greater than 21 units.

-Refer to the Diagram Above