Exhibit 6-15 Long-run average cost In Exhibit 6-15, diseconomies of scale are shown in the range of:

Question

Exhibit 6-15  Long-run average cost  In Exhibit 6-15, diseconomies of scale are shown in the range of:

Quizplus · Accepted Answer

The exhibit shows that as the quantity produced increases from 1 to 1,000 units per week, the long-run average cost (LRAC) decreases at first but then starts to increase again beyond 1,000 units per week. This indicates that there are economies of scale up to 1,000 units per week, but beyond that there are diseconomies of scale. Therefore, the range of diseconomies of scale is 1,000 to 2,000 units per week, which is choice C.

Exhibit 6-15 Long-Run Average Cost in Exhibit 6-15, Diseconomies of Scale