Asked by Jordan Wagner on May 02, 2024
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When an increase in the firm's output reduces its long-run average total cost,it achieves _____ scale.
A) economies of
B) diseconomies of
C) constant returns to
D) variable returns to
Economies of Scale
Cost advantages achieved by increasing production levels, resulting in lower per-unit costs due to spreading fixed costs over more units.
Long-Run Average Total Cost
A concept in economics that represents the per-unit cost of production in the long term, where all inputs are considered variable.
Scale
Refers to the size or level of operation of a process or system, often used in contexts of production, distribution, or analysis.
- Master the understanding of economies of scale, constant returns to scale, and diseconomies of scale concepts.
Verified Answer
Learning Objectives
- Master the understanding of economies of scale, constant returns to scale, and diseconomies of scale concepts.
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