Economies of scale occur when
A)long-run average total costs rise as output increases.
B)long-run average total costs fall as output increases.
C)average fixed costs are falling.
D)average fixed costs are constant.

Question

Quizplus · Accepted Answer

Economies of scale refer to the reduction in per-unit cost as the scale of production increases, which is represented by a decrease in long-run average total costs with an increase in output.

Economies of Scale Occur When