If there are diseconomies of scale within a given range of output,which of following is (are)TRUE?
A) The short-run average cost curve must be upward sloping within that range of output.
B) The long-run average cost curve must be upward sloping within that range of output.
C) Long-run average cost must equal short-run average cost.
D) All of the above.

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the phenomenon where, as the scale of production increases, the cost per unit of output increases. This is reflected in the long-run average cost curve, which slopes upward when diseconomies of scale are present. The short-run average cost curve may not necessarily be upward sloping in the same range due to the fixed nature of some inputs in the short run. Long-run average cost does not have to equal short-run average cost, as the long-run average cost considers the cost of all inputs as variable, while the short-run average cost considers some inputs as fixed.

If There Are Diseconomies of Scale Within a Given Range