Economies of scale refers to when:

Question

Quizplus · Accepted Answer

Economies of scale occur when there is an increase in the quantity of output and it leads to a decrease in the average total cost in the long run. This is due to the fact that fixed costs can be spread over a larger quantity of output, leading to a reduction in average fixed cost. Additionally, there may be cost savings associated with producing in larger quantities, such as purchasing inputs in bulk or more efficient production processes.

Economies of Scale Refers to When