When long-run average costs increase as output increases, there are
A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) constant marginal costs.

Question

Quizplus · Accepted Answer

When long-run average costs increase as output increases, there are diseconomies of scale. This means that as output increases, the average cost of producing each unit of output also increases. This can be due to a number of factors, such as increasing input costs, decreasing efficiency, or increasing coordination costs.

When Long-Run Average Costs Increase as Output Increases, There Are