If a Firm Builds a Larger Plant and Diseconomies of Scale

question 116

Multiple Choice

If a firm builds a larger plant and diseconomies of scale apply,which of the following statements is correct?

• A)The economic capacity output of the larger plant has a lower average cost.
• B)The economic capacity output of the larger plant has the same average cost.
• C)The economic capacity output of the larger plant has higher average cost.
• D)The LRAC cost curve will decrease as output increases.

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Definitions:

Abnormal Behavior

Actions, thoughts, or emotions that are considered deviant from societal norms or personal distress, potentially indicative of a psychological disorder.

Rare

Uncommon or infrequent; in the context of objects or events, signifies something that is not typically encountered.

Societal Norms

Established conventions or standards of behavior expected by a society or social group.

Psychopathology

The study of abnormal thoughts, feelings, and behaviors that may be indicative of mental illness.