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> assuming they are producing with increasing marginal costs, which is generally true

The norm is marginal production costs decreasing with scale. The usual exception to it is when those costs stay constant.

Unitary costs increasing with scale isn't unheard of, but it's also not common in any way.



Up to a certain point, yes. But, in the short term, firms must increase their production by, say, hiring more workers. They might now have a less optimal worker/capital ratio which would increase their per unit costs. In the long run, their costs are flatter but still could eventually increase with quantity, imagine they're using all the resources locally available and have to start importing from somewhere else, that's going to increase costs.




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