Experiencing economies of scale or diseconomies of scale

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State whether the following firms are experiencing economies of scale or diseconomies of scale.

a. West Company can produce 1,500 units at an average total cost of $2.50 or 1,800 units at an average total cost of $2.55.

b. North Company can produce 500,000 units at a total cost of $220,000 or 600,000 units at a total cost of $250,000.

c. Iams can produce 10,000 bags of dog food at a total cost of $150,000. If they increase their production by 7%, total costs will rise by 3%.

Reference no: EM13734430

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