If a company triples its output and its average cost decreases,then the firm is definitely experiencing
A) diseconomies of scale.
B) decreasing marginal returns.
C) increasing marginal returns.
D) economies of scale.
E) Both answers C and D are correct.

Question

Quizplus · Accepted Answer

Economies of scale occur when increased production leads to lower average costs. Therefore, if a company triples its output and its average cost decreases, the firm is experiencing economies of scale.

If a Company Triples Its Output and Its Average Cost