What is meant by diseconomies of scale?
A)A reduction in costs per unit due to increases in efficiency of production
B)The smallest level of output (unit volume) that a plant or firm can produce to minimize its long-run average costs
C)The average total cost of production decreases as a result of increasing the number of different goods produced
D)An increase in marginal cost when output is increased

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to a situation where the cost per unit of output increases as a firm or plant increases its production beyond a certain level. This is often due to the fact that the increased output results in higher average costs or inefficiencies in production. An increase in marginal cost when output is increased is one of the main reasons for diseconomies of scale. Therefore, option D is the correct answer.

What Is Meant by Diseconomies of Scale