When a firm is experiencing diseconomies of scale long run

Answer:

c) Diseconomies of scale.

Explanation:

Diseconomies of scale are the increasing costs that a firm experiences when it produces more output. It is the opposite to economices of scale (hence the name).

In this case the firm is experiencing diseconomies of scale because its costs go up as it produces from 2,000 to 4,000 airplanes. This may result due to communication costs (for example, if the firm has many separate plants), duplication of efforts, diminishing marginal productivity of the factors or production, or even office politics.

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