When Jean Cult Inc

question 86

Multiple Choice

When Jean Cult Inc.was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $20.However, when the output level was increased beyond 12,000 units, the cost per unit increased to $22.This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating.What is this phenomenon known as?

• A) Resource ambiguity
• B) Diseconomies of scale
• C) Network effect
• D) Learning-curve effect

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Definitions:

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