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Question
A firm is considering changing its plant size. It calculates the amount of output it would be able to produce and the total cost for various plant sizes, as shown in the accompanying table. If the firm is currently using plant size C, the firm is experiencing which of the following?
| Plant Size | Quantity | Total Cost ($) |
| A | 1 | 10 |
| B | 10 | 80 |
| C | 100 | 900 |
| D | 200 | 2,000 |
| E | 500 | 5,500 |
| F | 1,000 | 15,000 |
a. economies of scale
b. diseconomies of scale
c. constant returns to scale
d. diminishing marginal product
e. increasing marginal product
Answer
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