Economies of scale are exclusively a long-run phenomenon, while the law of diminishing marginal returns applies to both the short-run and to the long-run.

Question

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Economies of scale are primarily a long-run phenomenon because they result from the expansion of production and efficiency improvements over time. The law of diminishing marginal returns, however, applies only in the short run, when at least one factor of production is fixed; in the long run, all factors of production are variable, allowing firms to adjust all inputs to avoid diminishing returns.

Economies of Scale Are Exclusively a Long-Run Phenomenon, While the Law