Recall the Application about scale economies in the production of electricity from wind to answer the
following question(s).
-Recall the Application. Since a large or a small wind turbine have similar installation, operating and maintenance costs, but a large turbine has four times the generating capacity but costs less than three times as much as a small turbine, the average cost of generating electricity with wind is
A)constant at each output.
B)increasing as output increases.
C)decreasing as output increases.
D)at first decreasing and then increasing as output rises.

Question

Quizplus · Accepted Answer

The average cost of generating electricity with wind decreases as output increases because larger turbines have a lower cost per unit of capacity due to economies of scale.

Recall the Application About Scale Economies in the Production of Electricity