When Do Diseconomies of Scale Occur

question 142

Multiple Choice

When do diseconomies of scale occur

• A)when average fixed costs are falling
• B)when average fixed costs are constant
• C)when long-run average total costs rise as output increases
• D)when long-run average total costs fall as output increases

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Definitions:

Profit Maximizing

The procedure a business uses to ascertain the most profitable price and volume of output.

Monopolist

A single seller in a market, who has significant control over the price and supply of a specific good or service.

Marginal Cost

The increase in total cost resulting from producing one additional unit of a good or service.

Price Discriminate

A pricing strategy where a seller charges different prices for the same product or service to different customers, based not on costs, but on willingness to pay.