- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 5. Understanding Economies and Diseconomies of Scale
CFA Practice Question
The upward-sloping part of the long-run average total cost curve is explained by ______.
A. diseconomies of scale
B. output levels that exceed the minimum efficient level of production
C. decreasing marginal productivity
Explanation: When diseconomies of scale are present, increases in output produce increases in long-run average total cost. Decreasing marginal productivity is a short-run concept.
User Contributed Comments 1
| User | Comment |
|---|---|
| achu | That's right, falling marginal productivity is SHORT RUN IDEA. |