When long-run average total cost decreases as output increases,a firm experiences
A)increasing average fixed cost
B)decreasing total cost
C)economies of scale
D)diseconomies of scale
E)constant returns to scale

Question

Quizplus · Accepted Answer

When long-run average total cost decreases as output increases, it means the firm is experiencing economies of scale. This occurs when the firm is able to increase production and reduce costs through increased specialization of labor, bulk ordering of supplies, and other factors that allow the firm to take advantage of efficiencies of scale.

When Long-Run Average Total Cost Decreases as Output Increases,a Firm