If a firm enlarges its factory size and realizes higher average (per unit) costs of production then:

Question

Quizplus · Accepted Answer

When a firm enlarges its factory size and realizes higher average (per unit) costs of production, it has experienced diseconomies of scale. This is because as the scale of production increases, there may be inefficiencies in managing the larger operation and coordinating production processes, leading to higher costs per unit produced.

If a Firm Enlarges Its Factory Size and Realizes Higher