Graph 13-4
This graph depicts average total cost functions for a firm that produces automobiles. Use the graph to answer the following question(s).
-Refer to Graph 13-4. At levels of output below point M, the firm experiences:

Question

Graph 13-4
  This graph depicts average total cost functions for a firm that produces automobiles. Use the graph to answer the following question(s).
-Refer to Graph 13-4. At levels of output below point M, the firm experiences:

Quizplus · Accepted Answer

At levels of output below point M, the average total cost is decreasing which implies that the firm is experiencing economies of scale. This means that as output increases, the cost per unit decreases, allowing the firm to experience lower cost and potentially higher profits.

Graph 13-4 This Graph Depicts Average Total Cost Functions for Functions