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

Question

Quizplus · Accepted Answer

A decrease in long-run average costs resulting from decreases in output is attributed to diseconomies of scale, which occur when a firm becomes less efficient as it increases production, leading to higher average costs.

A Decrease in Long-Run Average Costs Resulting from Decreases in Output