If we know that a firm is experiencing diseconomies of scale,which of the following statements is true?
A)The firm is operating on the upward-sloping segment of its LRAC curve.
B)The firm is experiencing increasing returns to scale.
C)Both pecuniary and technical economies of scale must be present.
D)If all inputs were increased by 10% then output would rise by more than 10%.
E)The firm is also experiencing diminishing marginal returns.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm experiences an increase in long-run average costs as it increases its scale of production. This means that the firm is operating on the upward-sloping segment of its long-run average cost curve.

If We Know That a Firm Is Experiencing Diseconomies of Scale,which