The positively sloped part of long run cost curve of a firm is due to ___________.

economies of scale

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diseconomies of scale

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diminishing returns to scale

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marginal utility theory

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Solution

The correct option is B diseconomies of scale
The latter part of the long run average cost positive slope to illustrate how average cost increases due to diseconomies of scale while the firm experiences decreasing returns to scale as a consequence of growing beyond optimality.

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