When costs grow more than in proportion to output, then a firm is experiencing:

Name: When costs grow more than in proportion to output, then a firm is experiencing:
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Question

Quizplus · Accepted Answer

When costs increase more than proportionally with output, it indicates that the firm is facing diseconomies of scale. This typically occurs when a firm grows too large and inefficiencies start to creep in, leading to an increase in the average cost per unit of output.

When Costs Grow More Than in Proportion to Output, Then