A firm is experiencing ________ on the upward-sloping portion of a firm's long run average cost curve.

A) increasing returns to scale
B) constant returns to scale
C) decreasing returns to scale
D) diminishing marginal returns

Decreasing Returns to Scale

A situation in which, as the scale of production increases, the output increases at a proportionally smaller rate, leading to increased average costs.

Long Run Average Cost Curve

A graphical representation showing the minimum average cost at which any output level can be produced in the long term when all inputs, including capital, are variable.