A firm that has lower costs per unit as it increases production in the long run has:
A)increasing returns to scale.
B)decreasing returns to scale.
C)increasing opportunity costs.
D)scale reduction.

Question

Quizplus · Accepted Answer

The lower costs per unit with increasing production indicate increasing returns to scale. This means that as the firm increases its production scale, it is able to reduce its costs and become more efficient.

A Firm That Has Lower Costs Per Unit as It