Explain the Differences Between Diminishing Marginal Returns and Diseconomies of Scale

question 17

Essay

Explain the differences between diminishing marginal returns and diseconomies of scale.

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Definitions:

Industry Short-run

A period in which at least one of a firm's inputs is fixed, limiting the firm's ability to adjust fully to market changes.

Marginal Cost

The financial addition incurred by manufacturing one more unit of a product or service.

Fixed Cost

represents expenses that do not change in total regardless of the level of output or activity, such as rent or salaries.

Lawn-mowing

The act of cutting the grass on lawns to maintain a neat appearance and promote healthy grass growth.