An increase in long-run average costs resulting from increases in output is
A) attributed to economies of scale.
B) attributed to diseconomies to scale.
C) attributed to constant returns to scale.
D) attributed to the law of diminishing marginal product.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when an increase in output leads to an increase in the long-run average cost of production. This can be due to factors such as increased complexity in production, issues with coordination and communication, and diminishing returns to scale. Therefore, option B is the correct choice for this question.

An Increase in Long-Run Average Costs Resulting from Increases in Output