A firm notices that when it increases output beyond an initial level ,average total cost decreases.For this firm,the region of output beyond is characterized by
A) economies of scale.
B) diseconomies of scale.
C) constant economies of scale.
D) the minimum efficient scale.

Question

A firm notices that when it increases output beyond an initial level  ,average total cost decreases.For this firm,the region of output beyond  is characterized by
A) economies of scale. 
B) diseconomies of scale. 
C) constant economies of scale. 
D) the minimum efficient scale.

Quizplus · Accepted Answer

The fact that average total cost decreases as output increases beyond a certain level suggests that the firm is experiencing economies of scale. This means that the firm is able to take advantage of cost savings associated with producing a higher volume of output, such as increased specialization, division of labor, and bargaining power with suppliers. Therefore, the region of output beyond the initial level is characterized by economies of scale. The other choices (B, C, and D) do not accurately capture this phenomenon.

A Firm Notices That When It Increases Output Beyond an Initial