Economies of scale are present when
A)the LRAC curve slopes downward.
B)average total cost remains constant as input increases.
C)average total cost rises as output increases.
D)the LRAC curve is horizontal.
E)total fixed cost increases.

Question

Quizplus · Accepted Answer

Economies of scale are present when the LRAC curve slopes downward, indicating that as output increases, the average cost per unit decreases due to increased efficiency and spreading of fixed costs over more units.

Economies of Scale Are Present When