If a firm is in the region of diseconomies of scale, what happens to its long-run average total cost as it increases production?
Explanation
This question tests the definition of diseconomies of scale, a situation where a firm becomes less efficient as it grows larger, causing its per-unit costs to rise.
Other questions
What is the primary objective that economists typically assume for a firm, as stated in Chapter 13?
How does Chapter 13 define 'total revenue' for a firm?
What is the key distinction between an economist's view of costs and an accountant's view of costs?
In the example of Caroline's Cookie Factory, her forgone income as a computer programmer is considered what type of cost by an economist?
Why is economic profit typically smaller than accounting profit?
In the Quick Quiz on page 262, Farmer McDonald spends 10 hours planting seeds, giving up banjo lessons he could have taught for $20 per hour. He also spends $100 on seeds. What is his total opportunity cost?
Continuing the Quick Quiz from page 262, if Farmer McDonald's seeds yield $200 worth of crops, what is his accounting profit?
Continuing the Quick Quiz from page 262, what is Farmer McDonald's economic profit?
According to Chapter 13, the relationship between the quantity of inputs and the quantity of output is called the:
What is diminishing marginal product, as described in Chapter 13?
Using Table 1 for Caroline's Cookie Factory, what is the marginal product of the third worker?
How is the shape of the total-cost curve related to the shape of the production function?
In Conrad's Coffee Shop from Table 2, what is the total cost of producing 5 cups of coffee?
What are 'fixed costs' as defined in Chapter 13?
Using Table 2 for Conrad's Coffee Shop, what is the firm's fixed cost?
What is the average total cost (ATC) of producing 3 cups of coffee at Conrad's Coffee Shop, according to Table 2?
How is marginal cost (MC) defined in Chapter 13?
From Table 2, what is the marginal cost of increasing production from 4 to 5 cups of coffee?
What is the typical shape of a firm's average-total-cost (ATC) curve, and why?
The marginal-cost curve intersects the average-total-cost curve at what point?
What is the 'efficient scale' of a firm?
In the example of Conrad's Coffee shop, what is the efficient scale of production?
Why does the long-run average-total-cost curve differ from the short-run average-total-cost curve?
What are 'economies of scale'?
What is a primary reason firms might experience economies of scale at lower levels of production?
When a firm experiences 'diseconomies of scale', what is happening?
What are 'constant returns to scale'?
In Figure 4's graph of Conrad's cost curves, the average fixed cost (AFC) curve is:
In Figure 4, why does the marginal cost (MC) curve eventually rise?
From Table 2, what is the average variable cost (AVC) of producing 2 cups of coffee?
When a firm is making production decisions, which cost is most important to consider when deciding how much to increase or decrease production by one unit?
What defines the relationship between short-run and long-run average total cost for a firm like Ford, as described on page 272?
According to the example on page 272, when Ford wants to increase car production from 1,000 to 1,200 cars per day, why does its average total cost rise in the short run but not in the long run?
In Figure 5 (Typical Cost Curves), why does the marginal cost (MC) curve first fall and then rise?
What is the reason given on page 273 for the existence of diseconomies of scale in a firm like Ford?
If a firm's long-run average total cost decreases as it increases output, the firm is experiencing:
At what quantity is a firm's average total cost minimized?
From Table 1 on page 263, what is the total cost of producing 90 cookies per hour at Caroline's factory if the factory cost is $30 per hour and worker cost is $10 per hour?
What is the key insight from Adam Smith's visit to a pin factory, as described in the FYI box on page 273?
A firm's total cost is divided into which two types of costs?
If a firm produces nothing, what will its total cost be?
In the context of Conrad's Coffee Shop (Table 2), the cost of coffee beans, milk, and sugar are examples of:
What is the total variable cost of producing 10 cups of coffee at Conrad's Coffee Shop?
The average fixed cost (AFC) of producing 10 cups of coffee at Conrad's Coffee Shop is:
If a business owner says, 'I can't shut down, I have to pay my rent,' what economic concept is she failing to apply?
What is the reason a typical firm's average variable cost (AVC) curve is U-shaped, as shown in Figure 5?
For a firm to be profitable from an economist's standpoint, its total revenue must cover:
According to Chapter 13, which of these is an example of an implicit cost?
If a firm's production process exhibits diminishing marginal product, what can be said about its total-cost curve?