The fact that since 1990 the number of movie screens in the United States has grown faster than the number of theaters illustrates the benefits of
A)economies of scale
B)constant long-run average cost
C)diseconomies of scale
D)increasing long-run average cost
E)a U-shaped marginal cost curve

Question

Quizplus · Accepted Answer

Economies of scale occur when the cost per unit decreases as the level of production increases. In the case of the movie industry, adding more screens to an existing theater would be more cost-effective than building a new theater from scratch. This allows for a lower cost per unit and an overall increase in efficiency. Therefore, the growth in the number of movie screens compared to the number of theaters suggests economies of scale.

The Fact That Since 1990 the Number of Movie Screens