When average costs fall as output increases,it is due to _____;when they fall at a given level of output it is due to _____.
A)economies of scale;learning by doing
B)economies of scale;diseconomies of scale
C)learning by doing;economies of scale
D)learning by doing;diseconomies of scale

Question

Quizplus · Accepted Answer

Economies of scale occur when average costs fall as output increases due to factors such as specialization of labor, bulk purchasing, and efficient use of machinery. On the other hand, learning by doing drives down costs when they fall at a given level of output due to the reduction of errors and increased efficiency gained through experience. Therefore, the correct choice is A, as it correctly distinguishes between the two concepts.

When Average Costs Fall as Output Increases,it Is Due to _____;When