In the long run Irene's Ice Cream Parlor incurs total costs of $2,500 when output is 1,250 units and $4,000 when output is 1,500 units.For this range of output,Irine's exhibits
A) economies of scale.
B) constant returns to scale.
C) diseconomies of scale.
D) efficient scale.

Question

Quizplus · Accepted Answer

Since the total cost increases when output is increased from 1,250 units to 1,500 units, Irene's Ice Cream Parlor exhibits diseconomies of scale in this range of output.

In the Long Run Irene's Ice Cream Parlor Incurs Total