CFA Practice Question

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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.
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