If the long-run average total cost curve is rising as output increases, then the firm faces diseconomies of scale.

Question

Quizplus · Accepted Answer

When the long-run average total cost curve is rising, it means that the cost per unit of production is increasing as output increases. This indicates that the firm is experiencing diseconomies of scale, which are the increasing costs that arise as the firm grows beyond a certain point. Therefore, the answer is A.

If the Long-Run Average Total Cost Curve Is Rising as Output