A firm experiences ________ when its ________ as output increases.
A)economies of scale;long-run average cost curve slopes downward
B)diseconomies of scale;average total cost curve slopes downward
C)economies of scale;long-run average cost curve shifts upward
D)diminishing marginal returns;average total cost curve shifts upward
E)constant returns to scale;long-run average cost curve shifts upward

Question

Quizplus · Accepted Answer

When a firm experiences economies of scale, it means that its long-run average cost curve slopes downward as output increases. This is because as the firm produces more output, it can spread its fixed costs over a larger quantity of goods, leading to lower average costs per unit of output.

A Firm Experiences ________ When Its ________ as Output Increases

A Firm Experiences When Its as Output Increases