A firm could experience diseconomies of scale if
A)One of its inputs is fixed
B)Marginal costs are rising
C)All of its inputs are variable
D)Both A & B

Question

A firm could experience diseconomies of scale if​
A)​One of its inputs is fixed
B)Marginal costs are rising
C)All of its inputs are variable
D)​Both A & B

Quizplus · Accepted Answer

A firm could experience diseconomies of scale if one of its inputs is fixed or if marginal costs are rising. This means that as the firm produces more, the cost per unit increases, causing inefficiencies in production. This can be due to factors such as declining productivity, increased coordination and communication costs, and difficulties in managing larger and more complex operations. If all of the inputs are variable, the firm is more likely to experience economies of scale, where the cost per unit decreases as output increases, due to greater specialization, learning, and utilization of resources.

A Firm Could Experience Diseconomies of Scale If​

A Firm Could Experience Diseconomies of Scale If