____ occur(s) when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become.
A)Economies of scope
B)Scale economies
C)Product differentiation
D)Perfect competition

Question

Quizplus · Accepted Answer

Scale economies occur when a firm experiences lower per-unit costs as it produces a greater output. This means that if a firm increases its input use by X percent, its output would increase by more than X percent, resulting in a lower cost to produce each unit. This phenomenon is also known as increasing returns to scale.

____ Occur(s) When an X Percent Increase in Input Use