Diseconomies of scale.

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Chapter 11, Problem 11.6.4RQ

To determine

Diseconomies of scale.

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The United Kingdom started regulating the size of grocery stores in the early 1990s, and today, the average size of a typical UK grocery store is roughly half the size of a typical U.S. store and two-thirds the size of a typical French store (Haskel and Sadun, 2011). What implications would such a restriction on size have on a store's average costs. Discuss in terms of economics of scale and scope. OA. Grocery store size does not affect the long-run average cost of production if there are economies of scale. B. Grocery store size does not affect the long-run average cost of production if there are diseconomies of scale c. The long-run average cost of production for U.K. grocery stores is lower if there are diseconomics of scale Oo. The long-run average cost of production for U.K. grocery stores is higher if there are diseconomics of scale. OE. The long-run average cost of production for U.K. grocery stores is higher if there are no economies of scale Assume smaller grocery stores…