A firm is said to enjoy economies of scale over the range of output for which the long-run average cost is:
A) Increasing
B) Constant
C) Decreasing
D) None of the above

Question

Quizplus · Accepted Answer

When the long-run average cost is decreasing, a firm is said to enjoy economies of scale, meaning that as the firm produces more output, the cost per unit of output decreases due to the spread of fixed costs over a larger number of units. This is a result of the firm experiencing increased efficiency and productivity as it expands its operations, leading to lower costs. Therefore, the best choice is C.

A Firm Is Said to Enjoy Economies of Scale Over