Long-Run Production Costs Practice Test

A firm that prints textbooks can operate any one of three plant sizes in the long run. Based on the short-run ATC curves shown, which statement best explains the firm’s diseconomies of scale at high output (from $90$ to $120$ books per hour)?

A firm that packages snack foods expands output by adding layers of management and additional production lines. Based on the LRAC curve shown, which statement best explains the firm’s diseconomies of scale at high output (from $80$ to $120$ units per day)?