When the size of a factory (and all its associated inputs)doubles and,as a result,output more than doubles,
A)The law of diminishing returns must not apply in the smaller factory.
B)Economies of scale must exist.
C)The short-run ATC curve must be declining.
D)Marginal costs must be declining.

Question

Quizplus · Accepted Answer

If the size of a factory (and all its associated inputs) doubles and output more than doubles, it indicates that economies of scale exist. This means that as the scale of production increases, the cost per unit of output decreases, leading to an increase in productivity and output. The other options do not necessarily have to be true in this scenario.

When the Size of a Factory (And All Its Associated