Asked by Dashiel Gayle Carreon on May 01, 2024
Verified
Economies of scale occur when
A) long-run average total costs rise as output increases.
B) long-run average total costs fall as output increases.
C) average fixed costs are falling.
D) average fixed costs are constant.
Economies of Scale
Economies of Scale describe the cost advantages that a business can achieve due to expansion, leading to a lower cost per unit of output.
Long-run Average Total Costs
The per-unit production cost when all factors of production are variable and optimized for scale.
- Understand the concepts of economies of scale, diseconomies of scale, and constant returns to scale.
Verified Answer
ZC
Zikyah ConwayMay 01, 2024
Final Answer :
B
Explanation :
Economies of scale refer to the reduction in per-unit cost as the scale of production increases, which is represented by a decrease in long-run average total costs with an increase in output.
Learning Objectives
- Understand the concepts of economies of scale, diseconomies of scale, and constant returns to scale.