The positively-sloped part of the long-run average total cost curve is due to which of the following?
A)Diseconomies of scale.
B)Diminishing returns.
C)The firm being able to take advantage of large-scale production techniques as it expands its output.
D)The increase in productivity that results from specialization.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm's long-run average total costs increase as it increases output, which is represented by the positively-sloped part of the long-run average total cost curve. This can happen due to factors such as increased complexity in management, communication difficulties, and inefficiencies that arise as a firm becomes too large.

The Positively-Sloped Part of the Long-Run Average Total Cost Curve