Why could diseconomies of scale never occur if production relationships were onl

Question

Why could diseconomies of scale never occur if production relationships were only technical relationships?

a) Because technical relationships mean that the marginal cost curve would be flat.

b) Because having technical relationships would mean that managers would not have to choose among production techniques.

c) Because the same technical process could be used over and over again at the same cost.

d) Because producers would have a greater variety of methods of production to avoid the diseconomies.

Explanation / Answer

c) The production processes can be used indefinitely by the firm so long as they are profitable. The cost associated with are same and thus the firms can avoid the diseconomies in the long run. Thus I beleive the correct option should be C. The technical relation explain the fixed output and other factor relation which can be used by the firm. The firms are not forced to change the production process, thus the firm can use the same process again and again to avoid diseconomies.

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