Asked by Bryan Swartz on Apr 29, 2024
Verified
Economies of scale are most closely associated with a firm's
A) ATC curve.
B) AVC curve.
C) MC curve.
D) Demand curve.
ATC Curve
Average Total Cost Curve, a graph that shows the cost per unit of output produced, plotted against the quantity of output.
Economies Of Scale
Cost advantages reaped by companies when production becomes efficient, resulting in a decrease in the per-unit cost as the output increases.
- Acquire knowledge about the correlation between output size and the principles of economies of scale and diseconomies of scale.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
A
Explanation :
Economies of scale refer to the cost advantages that a firm experiences as it increases production. These cost advantages are reflected in the firm's ATC (average total cost) curve, which shows the relationship between the average total cost of production and the quantity of output produced. As output increases, the ATC curve typically slopes downward, indicating that the cost per unit of production decreases. Therefore, economies of scale are most closely associated with a firm's ATC curve.
Learning Objectives
- Acquire knowledge about the correlation between output size and the principles of economies of scale and diseconomies of scale.