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Diseconomies of scale arise primarily because: 
 
(i) firms must be large both absolutely and relative to the market to employ the most efficient production techniques available.
(ii) beyond some point, marginal product declines as additional units of a variable resource (labor) are added to a fixed resource (capital).
(iiii) the short-run average total cost curve rises when marginal product is increasing. 
(iv) of the difficulties involved in managing and coordinating a large business enterprise. 

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Casey Durgan
Casey DurganLv2
1 Apr 2020

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Related questions

Diseconomies of scale arise primarily because:
 
a. the short-run average total cost curve rises when marginal product is increasing.
 
b. of the difficulties involved in managing and coordinating a large business enterprise.
 
c. firms must be large both absolutely and relative to the market to employ the most efficient production techniques available.
 
d. beyond some point marginal product declines as additional units of a variable resource (labor) are added to a fixed resource (capital).
 

 

The law of diminishing returns indicates that:

(i) as extra units of a variable resource are added to a fixed resource the marginal product will decline beyond some point.

(ii) because of economies and diseconomies of scale, a competitive firm's long-run average cost curve will be U-shaped.

(iii) the demand for goods produced by purely competitive industries is downsloping.

(iv) beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.

26. To the economist total cost includes 

 A. explicit and implicit costs.

B neither implicit nor explicit costs.

C. implicit, but not explicit, costs.

D. explicit, but not implicit, costs.

 

27. Accounting profits are typically

A. greater than economic profits because the former do not take explicit costs into account

B. equal to economic profits because accounting costs include all opportunity costs.

C. smaller than economic profits because the former do not take implicit costs into account.

D. greater than economic profits because the former do not take implicit costs into account. 

 

28. Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were

A. $100,000 and its economic profits were $0.

B. $200,000 and its economic profits were $0.

C. $100,000 and its economic profits were $100,000.

D. $0 and its economic loss was $200,000.

 

29. The basic difference between the short run and the long run is that

A. all costs are fixed in the short run, but all costs are variable in the long run.

B. the law of diminishing returns applies in the long run but not in the short run.

C. at least one resource is fixed in the short run, while all resources are variable in the long run.

D. economies of scale may be present in the short run but not in the long run.

 

30. The law of diminishing returns indicates that

A. as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point.

B. because of economies and diseconomies of scale, a competitive firm's long-run average total cost curve will be U-shaped.

C. the demand for goods produced by purely competitive industries is downsloping.

D. beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.

 

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