Markets that exhibit economies of scale over the entire range of market output
A)Are natural monopolies.
B)Are perfectly competitive.
C)Have downward-sloping short-run average total cost curves.
D)Have upward-sloping long-run average total cost curves.

Question

Quizplus · Accepted Answer

Economies of scale mean that the average cost per unit decreases as the quantity produced increases. If this trend continues over the entire range of market output, it indicates that a single firm can produce the entire market output at the lowest possible cost. Such a market is a natural monopoly.

Markets That Exhibit Economies of Scale Over the Entire Range