When a firm is facing economies of scale,total costs will
A) decrease as the firm increases its output.
B) increase at a decreasing rate as the firm increases its output.
C) decrease at an increasing rate as the firm increases its output.
D) increase at an increasing rate as the firm increases its output.
E) increase proportionately to output.

Question

Quizplus · Accepted Answer

Economies of scale occur when a firm experiences a decrease in average cost as production levels increase. This means that total costs will increase at a decreasing rate as the firm increases its output.

When a Firm Is Facing Economies of Scale,total Costs Will