Asked by
Gillian Tamia
on Nov 04, 2024
Verified
A firm is experiencing ________ on the downward-sloping portion of a firm's long run average cost curve.
A) increasing returns to scale
B) constant returns to scale
C) decreasing returns to scale
D) diminishing marginal returns
Decreasing Returns to Scale
A situation in which increasing the scale of production leads to a proportionally smaller increase in output, often due to inefficiencies.
Long Run Average Cost Curve
A graphical representation showing the lowest cost at which a firm can produce any given level of output in the long run, where all inputs are variable.
- Analyze the distinction between economies of scale and diseconomies of scale.
- Fathom the interplay between the scale of production and the geometry of long-run average cost curves.
Verified Answer
GF
Learning Objectives
- Analyze the distinction between economies of scale and diseconomies of scale.
- Fathom the interplay between the scale of production and the geometry of long-run average cost curves.