If a firm's average total costs decrease as it increases its scale of production,the firm is experiencing

Question

Quizplus · Accepted Answer

Economies of scale occur when a firm's average total costs decrease as it increases its scale of production. This can happen due to a variety of factors, such as increased specialization, bulk purchasing discounts, and spreading fixed costs over more units of output. This allows the firm to produce goods or services more efficiently and at a lower cost per unit, resulting in higher profits.

If a Firm's Average Total Costs Decrease as It Increases