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Economics · May / June 2018 · Paper 11 · Question 13

2281Firms

An industry is experiencing diseconomies of scale. What will be happening to long run average cost and total cost?

  1. Along run average cost: decreasing; total cost: decreasing
  2. Blong run average cost: decreasing; total cost: increasing
  3. Clong run average cost: increasing; total cost: decreasing
  4. Dlong run average cost: increasing; total cost: increasing

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Correct answer: D. long run average cost: increasing; total cost: increasing

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