Electric utility companies have built larger and larger electric generating stations and, as a result, the long-run average cost of producing each kilowatt hour decreased. This is an example of
A) constant returns to cost.
B) increasing returns to cost.
C) economies of scale.
D) diseconomies of scale.

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs, as seen with larger electric generating stations reducing the cost per kilowatt hour.

Electric Utility Companies Have Built Larger and Larger Electric Generating