Register now or log in to join your professional community.
If a firm’s long-run average cost of production increases by15 percent as a result of an8 percent increase in production the firm is most likely experiencing:
The effect of increase in average cost of production over a long period can only be nullified by increase in Scale of Production by utilizing the remaining production capacities or by increasing the present level capacities by up gradation. Under the presumption: dis -economies in scale could be the answer.
It is B
I agree, it is dis-economies of scale.
