"The bigger the volume, the lower the cost, and we pass these savings on to you" is a familiar advertising slogan. It implies essentially that the
A) firm expects to experience increasing returns over the relevant level of output.
B) average fixed cost will decline or remain constant over the long run.
C) firm is altruistic.
D) total cost of the firm will remain constant as output expands.
E) consumer is able to pay less today because the total cost of the firm is expected to decline tomorrow.

Question

Quizplus · Accepted Answer

The slogan implies that as the firm produces more (bigger volume), it experiences increasing returns, which lowers the cost per unit, allowing the firm to pass on these savings to consumers.

"The Bigger the Volume, the Lower the Cost, and We