Economies of scale can be caused by all of the following except :
A) price discounts for large scale purchases.
B) labor specialization.
C) use of more productive equipment.
D) increases in the firm's average total cost.

Question

Quizplus · Accepted Answer

Economies of scale result in a decrease in the firm's average total cost as production increases. Therefore, D, which states "increases in the firm's average total cost," is the exception and is not a cause of economies of scale.

Economies of Scale Can Be Caused by All of the Following