Economies of scale arise when unit costs increase as a firm expands it output.

Name: Economies of scale arise when unit costs increase as a firm expands it output.
Brand: Quizplus
Rating: 4.8 (45 reviews)

Question

Quizplus · Accepted Answer

Economies of scale actually result in unit costs decreasing as a firm expands its output. This is because as output increases, fixed costs such as overheads and equipment can be spread over a larger number of units, resulting in lower costs per unit.

Economies of Scale Arise When Unit Costs Increase as a Firm