If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of:
A) lower wages.
B) economies of scale.
C) diseconomies of scale.
D) improved utilization of by-products.

Question

Quizplus · Accepted Answer

If a plant is operating in the positively-sloped portion of a long-run average cost curve, it means that the cost per unit of output is increasing as the scale of production increases. This indicates that the plant is experiencing diseconomies of scale, which could be due to various factors such as increased coordination and communication costs, diminishing returns to inputs, or problems with managerial efficiency. Lower wages or improved utilization of by-products would not necessarily affect the shape of the long-run average cost curve. Economies of scale would result in a negatively-sloped long-run average cost curve, where the cost per unit of output decreases as the scale of production increases.

If Your Plant Is Operating in the Positively-Sloped Portion of a Long-Run