If diseconomies of scale are present,
A)average total cost is decreasing.
B)the long-run average cost curve has a negative slope.
C)economies of scale are also present.
D)the long-run average cost curve has a positive slope.
E)the average total cost shifts downward.

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to a situation where an increase in the scale of production leads to an increase in the average cost of production. This means that the long-run average cost curve has a positive slope, indicating that as the firm expands its output, the cost per unit increases. Therefore, option D is the correct choice. Options A, B, and E are incorrect because they suggest that average total cost is decreasing or shifting downward, which is not consistent with the presence of diseconomies of scale. Option C is also incorrect because it suggests the co-existence of economies and diseconomies of scale, which is not possible as these are opposite phenomena.

If Diseconomies of Scale Are Present