When Do Diseconomies of Scale Occur

question 40

Multiple Choice

When do diseconomies of scale occur?

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

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Definitions:

Promissory Note

A fiscal device comprising a binding commitment from one party to another to remit a precise sum of money, which can be demanded anytime or on a predetermined date.

Merchandise

Goods that are bought and sold in business.

Sales Transaction

An exchange in which goods, services, or assets are sold and transferred from a seller to a buyer.

Percent of Receivables Method

An accounting method used to estimate the amount of a company's receivables that will not be collected.