Economies of scale exist whenever:

Question

Quizplus · Accepted Answer

Economies of scale occur when average total costs decline as output increases. This is usually due to the fact that fixed costs can be spread over a larger volume of output, resulting in lower average fixed costs per unit. Additionally, larger firms may be able to negotiate better deals on inputs, reducing their average variable costs. Overall, economies of scale allow firms to produce more efficiently and at lower costs as they increase their output.

Economies of Scale Exist Whenever