Diseconomies of scale occur when
A) long-run average costs fall as a firm expands its plant size.
B) long-run labor costs rise as a firm increases its output.
C) short-run average costs rise as a firm expands its plant size.
D) long-run average costs rise as a firm increases its output.
D
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Which of the following statements is equivalent to the law of diminishing marginal returns?
A. A stitch in time saves nine. B. You can’t make an omelet without breaking eggs. C. Too many cooks spoil the broth. D. If you can’t stand the heat, get out of the kitchen.
An advantage of macroeconomic policy based on pre-specified rules might be that ________
A) it is easier to stick to long-run considerations and avoid bad long-run outcomes B) it is more flexible than discretionary policy C) it is easier to adapt to short-run changes and avoid a bad short-run outcome D) all of the above E) none of the above
The potential output of an economy is the level of output produced when the
a. real wage equals the nominal wage. b. price level is constant. c. expected real wage equals the inflation rate. d. expected price level equals the unemployment rate. e. expected price level equals the actual price level.
Which of the following goods is most likely to be overconsumed?
A. Water from a reservoir B. Horses on a ranch C. Chickens on a farm D. Fish in the ocean