Diseconomies of scale shown by rising average total cost

Steps:

• Calculate average total cost (ATC = total cost / output) for each method at 1000 and 3000 units.
• Compare ATC changes: rising ATC indicates diseconomies of scale.
• For method B, ATC rises from 8 to 9.
• Confirm other methods show falling or constant ATC.

Why B is correct:

• Diseconomies of scale occur when ATC increases with output, per the law of returns to scale; B's ATC rises from 8 (8000/1000) to 9 (27000/3000).

Why the others are wrong:

• A: ATC falls from 8 to 4, showing economies of scale.
• C: ATC falls from 10 to 9, showing economies of scale.
• D: ATC constant at 10, showing constant returns to scale.

Final answer: B