A firm's long-run average cost of production increases by 15 percent as a result of an 8 percent increase in production the firm is most likely experiencing ____________.

economies of scale

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diseconomies of scale

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constant returns to scale

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none of the above

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Solution

The correct option is A diseconomies of scale
Since the firm's cost increases by 15% and the firm's output increases by 8%, the firm is experiencing diseconomies of scale, since the increase in output is less than proportional to the increase in inputs.

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A firm's long-run average cost of production increases by 15 percent as a result of an 8 percent increase in production the firm is most likely experiencing ____________.

The correct option is A diseconomies of scaleSince the firm's cost increases by 15% and the firm's output increases by 8%, the firm is experiencing diseconomies of scale, since the increase in output is less than proportional to the increase in inputs.

The correct option is A diseconomies of scale
Since the firm's cost increases by 15% and the firm's output increases by 8%, the firm is experiencing diseconomies of scale, since the increase in output is less than proportional to the increase in inputs.