When a firm is experiencing economies of scale
A) the MP curve slopes upward.
B) the LRAC curve slopes downward.
C) diminishing returns to labor have been suspended.
D) the MC curve slopes downward.

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs, which is represented by a downward-sloping Long-Run Average Cost (LRAC) curve.

When a Firm Is Experiencing Economies of Scale