When long-run average costs decrease as output increases, there are
A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) constant marginal costs.

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs, due to factors like spreading fixed costs over more units or operational efficiencies.

When Long-Run Average Costs Decrease as Output Increases, There Are