If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:

Question

Quizplus · Accepted Answer

The decreasing minimum points of short-run average total cost curves suggest economies of scale. This means that as quantity of output increases, the firm benefits from lower production costs per unit, indicating that larger scale production is more efficient. Therefore, option C is correct. Option A is incorrect because producing less output would not take advantage of the economies of scale. Option B is incorrect because variable costs are not constant along the LRAC curve, as they can change with changes in production volume. Option D is incorrect because if the short-run average total cost curves exhibit economies of scale, then doubling output would not result in doubling total costs, but rather lowering per unit costs.

If the Minimum Points of All the Possible Short-Run Average