Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 7, Problem 8MC
To determine
Diseconomies of scale.
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Students have asked these similar questions
If producing more output increases average cost then
a)there are diseconomies of scale.
b)there are economies of scope.
c)there are no economies of scale.
d)there are diseconomies of scope.
It costs a firm $200 per unit to produce product A and $350 per unit to produce product B individually. If the firm can produce both products
together at $500 per unit of product A and B, this exhibits signs of
A. diseconomies of scale.
B. diseconomies of scope.
C. economies of scale.
D. economies of scope.
O
Reset Selection
If average total costs increase when the output level increases, then
O there are diseconomies of scope.
O there are economies of scope.
O there are no economies of scale.
O there are diseconomies of scale.
Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- Distinguish between economies of scale and diseconomies of scale. Give examples of why a firm may experience economies of scale.arrow_forwardIf there are diseconomies of scale within a given range of output, which of following is(are) TRUE? A.Long-run average cost must equal short-run average cost. B.The long-run average cost curve must be upward sloping within that range of output. C.The short-run average cost curve must be upward sloping within that range of output. D. All of the above.arrow_forwardRefer to the above diagram. Diseconomies of scale?arrow_forward
- How does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model in the photo to answerarrow_forwardIn the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits a. diseconomies of scale. b. efficient scale. c. economies of scale. d. constant returns to scale.arrow_forwardEconomies of scale means that as we use more of an inout like labor. our cost per unit goes down. as we increase the amount of all inputs at the same time, our cost per unit goes down. we can decrease out cost per unit if we produce a different product than we used to. we gan decrease our costs per unit as the number of producers in the entire industry increases.arrow_forward
- The unlabeled red curves in this figure derive their shapes from: a. decreasing, then increasing, short-run returns. b. increasing, then decreasing, short-run returns. c. economies, then diseconomies, of scale. d. diseconomies, then economies, of scale.arrow_forwardThe downward-sloping segment of the long-run average cost curve corresponds to * diseconomies of scale. both economies and diseconomies of scale. economies of scale the decrease in average variable costs.arrow_forwardType your answers. a)In your own words, state and briefly explain two reasons that lead to economies of scale. 50 to 100 words b)In your own words, state and briefly explain two reasons that lead to diseconomies of scale. 50 to 100 wordsarrow_forward
- A Vietnamese restaurant in Port-of-Spain decides to use a part of its dining hall to sell Vietnamese grocery items. How do you classify this expansion? a.None of these other available answer choices is b.Economies of scale c.Diseconomies of scope d.Economies of scope e.Economies of scalearrow_forwardWhenever a firm increases both its labor and capital by 2 percent, and as a result, output increases by more than 2 percent, then the production process is exhibiting a. increasing returns to scale. b. constant returns to scale. c. decreasing returns to scale. d. economies of scale. e. both a) and d) are correctarrow_forwardDefine the economies and diseconomies of scale and depict graphically how they relate to the long run costs of production.arrow_forward
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