Which of the following statements about economies of scale is NOT true?
A)One reason economies of scale occur is because fixed costs can be spread over more units of production as output increases.
B)One reason economies of scale occur is because employees become more efficient as volume increases.
C)Economies of scale refers to the fact that as volume increases,total cost of production decreases.
D)Economies of scale may not exist at all levels of production.

Question

Quizplus · Accepted Answer

Economies of scale refer to the fact that as volume increases, average cost of production decreases, not total cost of production. Total cost may still increase as output increases, but at a decreasing rate due to economies of scale.

Which of the Following Statements About Economies of Scale Is