external diseconomies of scale

Question 1

what does external DEOS refer to?

Answer 1

• it refers to the rise in average costs for all firms in the industry if the industry’s size grows beyond a certain point

Question 2

what effect does external DEOS have on the LRAC curve?

Answer 2

• the LRAC curve will shift upwards

Question 3

what are the 2 sources of external DEOS?

Answer 3

• ## too many firms join the industry

Question 4

how does having too many firms in an industry