Diseconomies of Scale Occur When

question 196

Multiple Choice

Diseconomies of scale occur when

• A)long-run average costs rise as a firm increases its output.
• B)long-run average costs fall as a firm expands its plant size.
• C)short-run average costs rise as a firm expands its plant size.
• D)long-run labor costs rise as a firm increases its output.

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Definitions:

Rational Consumer

An economic concept where consumers aim to maximize their utility or satisfaction from their available resources.

Demand for Good

The quantity of a particular good or service that consumers are willing and able to purchase at various prices during a specified time period.

Square Feet

A unit of area measurement equivalent to the area of a square with sides of one foot in length.

Quasilinear Preferences

Preferences where utility is linear in one argument, usually money, allowing for easy analysis of changes in wealth while other goods are evaluated non-linearly.