In 1955,the chairman of the Sony corporation offered to sell transistor radios through department stores in the United States.Sony based its selling price on its average total cost of production.If a store bought 5,000 radios,Sony would sell them at $29.95 each.For 10,000 there would be a discount,and for more than 10,000 the price would begin to climb.Based on this information,Sony began experiencing diseconomies of scale

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when the cost per unit increases as production increases. The fact that the price begins to climb for quantities greater than 10,000 radios suggests that Sony experienced diseconomies of scale at that point.

In 1955,the Chairman of the Sony Corporation Offered to Sell