Question

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.

Answer 1

Answer:

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.

Answer 2

Answer:

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.