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Homework answers / question archive / If General Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double, then O the law of diminishing returns is in effect
If General Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double, then O the law of diminishing returns is in effect. O long-run average costs must be decreasing. the firm is experiencing diseconomies of scale. O the firm should increase production O the firm is experiencing constant returns to scale.
Answer
If general Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double then
Then the firm is experiencing diseconomies of scale
(Diseconomies of scale means when a company or business grows so large that the costs per unit increases, with this principle, rather than experiencing continued decreasing costs and increasing output, a firm sees an increase in costs when output is increased)
