When the defense department ordered 132 new airplanes, the cost per plane was estimated to be $580 million. a cut in the order to 75 planes increased the per plane cost to $800 million. this change in per unit cost can be explained by?

C. The loss of economies of scale

By definition represent "the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale" and thats the corrct option since if we increase the order we have a lower price.

Step-by-step explanation:

Assuming the following options we analyze one by one to select the correct one

A. A move to minimum efficient scale

By definition the minimum efficient scale (MES) or efficient scale of production is "the lowest point where the plant can produce such that its long run average costs are minimized" but thats not the case since the department order new planes and the costs are not minimized .

B. The law of diminishing returns

The law of diminishing marginal returns says that "at some point, adding an additional factor of production results in smaller increases in output" but that's not the case since we don't have smaller increases in output.

C. The loss of economies of scale

By definition represent "the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale" and thats the corrct option since if we increase the order we have a lower price.

D. An increase in fixed cost

That's False since on this case we don't have a fixed cost, the cost on this case depend on the size of the order.

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step-by-step explanation:

step-by-step explanation: