Graph 13-6
This graph depicts average total cost functions for a firm that produces automobiles. Use the graph to answer the following question(s).
-Refer to Graph 13-6. This firm experiences economies of scale at which output levels?

Question

Graph 13-6
  This graph depicts average total cost functions for a firm that produces automobiles. Use the graph to answer the following question(s).
-Refer to Graph 13-6. This firm experiences economies of scale at which output levels?

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs. This typically happens at lower output levels, below M, before the firm reaches the point of constant returns to scale or diseconomies of scale.

Graph 13-6 This Graph Depicts Average Total Cost Functions for Functions