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Question:
A manufacturing plant exhibits diseconomies of scale if long-run average cost (LRAC) is:
A
increasing as output increases, and the plant is at its minimum efficient scale if LRAC is at its lowest level.
explanation
Diseconomies of scale are present when long-run average cost increases as output increases. The minimum efficient scale is the plant size that produces the quantity of output for which LRAC is at a minimum.
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