Question

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. the kayak company exhibits

a. diseconomies of scale because total cost is rising as output rise

Answer 1

I am not sure what your other choices are, but this choice is not correct.

Economies of scale deal with marginal costs and NOT total costs. You would always expect TOTAL costs to go up when you produce more of an item, even when you have economies of scale. Economies of scale says that costs go up LESS with each new unit up until a certain point