When diseconomies of scale occur, Multiple Choice marginal cost intersects average total cost. the long-run average total cost curve rises. average fixed costs will rise. the long-run average total cost curve falls.

Question

Frederick Stein

Business

9 November, 19:38

When diseconomies of scale occur, Multiple Choice marginal cost intersects average total cost. the long-run average total cost curve rises. average fixed costs will rise. the long-run average total cost curve falls.

+3

Answers (2)

Know the Answer?

Peyton Cardenas · Answer 1

the long-run average total cost curve rises

Explanation

Diseconomies of scale is a situation that comes up due to the growth of a business which leads to increase in cost per unit. It is the cost disadvantage a business accrue as a result of increase in output leading to increase in cost per unit in the production of goods and services. When diseconomies of scale occur, as output rises unit cost falls.

Samara Meza · Answer 2

When diseconomies of scale occur, the long-run average total cost curve rises

Explanation:

Diseconomies of scale are the cost disadvantages organizations accrue due to an increase in overhead costs, resulting in production of goods and services at increased per-unit costs.

At this state, the long run average cost (LRAC) of production increases with the increase in per unit of goods produced.

Diseconomies of scale can occur for a variety of reasons, but usually comes from the difficulty of managing an increasingly large workforce because the corresponding increase results in extra employee cost, compliance cost, administration cost etc.