Figure 13-6

-Refer to Figure 13-6.When does the firm experience economies of scale
A)if it changes its level of output from Q₁ to Q₂
B)if it changes its level of output from Q₂ to Q₃
C)if it changes its level of output from Q₃ to Q₄
D)if it changes its level of output from Q₄ to Q₅

Question

Figure 13-6
 
-Refer to Figure 13-6.When does the firm experience economies of scale
A)if it changes its level of output from Q₁ to Q₂ 
B)if it changes its level of output from Q₂ to Q₃ 
C)if it changes its level of output from Q₃ to Q₄ 
D)if it changes its level of output from Q₄ to Q₅

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to a lower average cost per unit. This typically happens when moving from a lower level of output to a higher level, such as from Q₁ to Q₂, where the firm can spread fixed costs over more units.

Figure 13-6 -Refer to Figure 13-6.When Does the Firm Experience Economies of Firm