The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases,the
A) average total cost decreases.
B) average total cost increases.
C) marginal cost increases.
D) marginal cost decreases.
E) average variable cost is constant and the average fixed cost decreases.

Question

Quizplus · Accepted Answer

Economies of scale are experienced when the average total cost decreases as output increases. This means that the cost per unit of output decreases as the scale of production increases. Therefore, the correct answer is A.

The Portion of the Long-Run Average Cost Curve in Which