In the short run, if the average total cost of producing 4,000 shoes is $10 and the average total cost of producing 7,000 shoes is $9, then the most efficient point of production occurs at a quantity at least as great as 7,000.

Question

Quizplus · Accepted Answer

The decrease in average total cost from $10 to $9 as production increases from 4,000 to 7,000 shoes indicates economies of scale, suggesting that efficiency improves with higher production levels, at least up to 7,000 shoes.

In the Short Run, If the Average Total Cost of Producing