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Which of the following graphs best represents a typical average total cost (ATC) curve in the short run for a firm?
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10. The Costs of Production
Average Total Cost: Short Run and Long Run
Multiple Choice
What factors can create diseconomies of scale?
A
Increased coordination and communication problems, managerial inefficiencies, and bureaucratic costs as firm size grows.
B
Proportional increases in all inputs that keep average costs unchanged as output increases.
C
Bulk purchasing discounts, greater specialization, and more efficient capital use that lower per-unit costs.
D
Adoption of improved production techniques and automation that reduce marginal cost at larger scale.
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