When do economies of scale occur?
A)When a firm's long-run average total costs fall as it increases the quantity of output it produces.
B)When the marginal product of labour is greater than the average product of labour.
C)When short-run marginal cost falls.
D)When the demand for a firm's output increases.

Question

Quizplus · Accepted Answer

Economies of scale occur when a firm's long-run average total costs decrease as it increases the quantity of output it produces. This could be due to factors such as increased specialization, bulk purchasing, and the spreading of fixed costs over a greater output. The other options are not directly related to economies of scale.

When Do Economies of Scale Occur