As table manufacturing company produces more tables,the average total cost of each table produced increases.This is because:
A)Total fixed costs are decreasing as more tables are produced
B)There is economies of scale
C)There is diseconomies of scale
D)Total variable cost is decreasing as more clubs are produced.

Question

Quizplus · Accepted Answer

This scenario exhibits diseconomies of scale. As production increases, the cost per unit increases. This is typically caused by increased complexity, communication breakdowns, and the need for additional resources to maintain efficiency.

As Table Manufacturing Company Produces More Tables,the Average Total Cost