When a Firm Is Experiencing Diseconomies of Scale

question 49

Multiple Choice

When a firm is experiencing diseconomies of scale,

• A)it should increase the amount of labor it hires.
• B)it should lower its price to the competitive level.
• C)its average total costs will decline if it reduces its scale of operations.
• D)it should increase the size of its plant to decrease its average total costs.

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Definitions:

Social Learning Theory

A theory that posits individuals learn behaviors, norms, and values by observing and imitating the actions of others.

Bobo Doll

A term referencing an experiment in social psychology that demonstrated how children imitate behaviors observed in adults, particularly acts of aggression.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, drama, or psychological means.

Death Instinct

A concept in psychoanalytic theory referring to an unconscious drive toward decay, destruction, and death.