Question

Which of the following reflects diseconomies of scale?

A. Marginal product decreases as output increases
B. Short-run marginal cost increases as output increases
C. Long-Run marginal cost increases as output increases
D. Short-run average cost increases as output increases
E. As output doubles, long run total cost more than doubles

Answer 1

Diseconomies of scale occur when the long-run average cost of producing output increases as total output increases. Option E reflects diseconomies of scale as it states that long-run total cost more than doubles as output doubles.

Step-by-step explanation:

The correct option that reflects diseconomies of scale is option E: As output doubles, long-run total cost more than doubles. Diseconomies of scale occur when the long-run average cost of producing output increases as total output increases. This means that as the firm expands its production, it experiences increasing costs per unit of output. In option E, the statement that long-run total cost more than doubles as output doubles indicates an increase in average costs and reflects diseconomies of scale.

Answer 2

B. Short-run marginal cost increases as output increases

Step-by-step explanation:

diseconomies of scale are the cost disadvantages that economic actors accrue due to an increase in organizational size or on output, resulting in production of goods and services at increased per-unit costs.