Economies of scale occur when
A)a firm's long-run average total costs fall as it increases the quantity of output it produces.
B)the marginal product of labor is greater than the average product of labor.
C)short-run marginal cost falls.
D)the demand for a firm's output increases.

Question

Quizplus · Accepted Answer

Economies of scale occur when a firm's long-run average total costs fall as it increases the quantity of output it produces. This means that the firm can produce more at a lower cost per unit, resulting in increased profitability.

Economies of Scale Occur When