Figure 12-9
The figure below depicts average total cost functions for a firm that produces automobiles.
-Refer to Figure 12-9.The firm experiences economies of scale at which output levels?

Question

Figure 12-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 12-9.The 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 levels of output, before reaching the minimum efficient scale, which is often represented by point M in such diagrams.

Figure 12-9 the Figure Below Depicts Average Total Cost Functions for a for a Firm