Which of the following best describes economies of scale?
A) They refer to the increase in output that results from the increased utilization of a single input.
B) They pertain to the long run only.
C) They imply that the average total cost curve will fall continuously as output increases in the short run.
D) They are the result of a diminishing marginal product.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale. They are associated with the long run, where all inputs can be varied by the firm, unlike the short run where at least one input is fixed.

Which of the Following Best Describes Economies of Scale