When the cost of producing a unit of a good falls as its output rate increases,
A)economies of scale exist.
B)economies of scope exist.
C)transactions costs are zero.
D)market coordination is unnecessary.
E)the firm is a partnership.

Question

Quizplus · Accepted Answer

The condition mentioned in the statement, where the cost of producing a unit of a good falls as the output rate increases, indicates economies of scale. It means that with an increase in the scale of production, the cost of production per unit decreases due to factors such as specialization, division of labor, and efficient use of capital.

When the Cost of Producing a Unit of a Good