If a single large firm is able to produce a market's output less expensively than many small firms is evidence that, for this market, there are
A)increasing returns to scale.
B)constant returns to scale.
C)decreasing returns to scale.
D)regulations in place that limit production costs.

Question

Quizplus · Accepted Answer

The fact that a single large firm can produce the market's output less expensively than many small firms indicates that there are increasing returns to scale. This means that the firm experiences cost savings as it increases its output, leading to lower average costs and higher profitability.

If a Single Large Firm Is Able to Produce a Market's