As a firm produces more and more CDs, the average cost of producing each CD falls. A curve showing the behavior of the average cost of a CD as more CDs are produced
A) would be positively and then negatively-sloped.
B) would be horizontal.
C) would be positively sloped.
D) would be negatively sloped.

Question

Quizplus · Accepted Answer

This is because as the firm produces more CDs, they are able to take advantage of economies of scale, which means that the cost per unit decreases as production increases, resulting in a negatively sloped curve for the average cost of a CD.

As a Firm Produces More and More CDs, the Average