____ occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become.
A)Economies of scope
B)Scale economies
C)Product differentiation
D)Perfect competition

Question

____ occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become.
A)Economies of scope 
B)Scale economies 
C)Product differentiation 
D)Perfect competition

Quizplus · Accepted Answer

Scale economies occur when the firm experiences lower per-unit costs as output increases. This is because a certain percentage increase in input usage leads to a higher percentage increase in output. As a result, the more the firm produces, the lower its per-unit costs become.

____ Occur When an X Percent Increase in Input Use