Which of the following statements explains the difference between diminishing returns and diseconomies of scale?
A)Diminishing returns are the result of changes in explicit costs. Diseconomies of scale are the result of changes in explicit costs and implicit costs.
B)Diminishing returns refer to production while diseconomies of scale refer to costs.
C)Diminishing returns cause a firm's marginal cost curve to rise; diseconomies of scale cause a firm's marginal cost curve to fall.
D)Diminishing returns apply only to the short run; diseconomies of scale apply only in the long run.

Question

Quizplus · Accepted Answer

Diminishing returns occur in the short run when adding more of one input leads to a decrease in the marginal product of that input. Diseconomies of scale occur in the long run when a firm's average costs increase as it scales up production.

Which of the Following Statements Explains the Difference Between Diminishing