Question

JudyJudy hires students at ​$5050 a day to mow lawnsmow lawns. SheShe leases equipment that costs ​$8080 a day. Suppose that JudyJudy doubles the number of students sheshe hires and doubles the amount of equipment that sheshe leases. If JudyJudy experiences diseconomies of scalediseconomies of scale​, herher ​long-run average cost curve​ ______. A. is horizontal B. shifts upward C. slopes downwardslopes downward D. slopes upwardslopes upward E. shifts downwa

Answer 1

Answer:

D. slopes upward

Explanation:

if Judy experiences diseconomies of scale this means the return for adding further factor into the economy decreases. Therefore the marginal cost increase more than the marginal revenue from the added factor.

His average cost curve will shift upwards. Each time Judy adds equipment and workers his cost increase more than the previous worker or equipment.

Resuming:

Producing an additional units is more expensive than the previous unit therefore, the average cost increases through units output.