Economies of scale means
A) average total cost rises as firm size and output increase
B) average total cost falls as firm size and output increase
C) small firms have a cost advantage over large firms
D) monopolistically competitive firms charge less than a monopoly
E) a monopoly makes more economic profit than a perfectly competitive firm

Question

Quizplus · Accepted Answer

Economies of scale occur when average total cost falls as the size of the firm and its output increase. This is because larger firms can often produce goods more efficiently than smaller ones, due to factors like bulk purchasing, more efficient production techniques, and spreading fixed costs over a larger output.

Economies of Scale Means