If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:

Question

Quizplus · Accepted Answer

Economies of scale occur when the long-run average cost decreases as the quantity of output increases, meaning that production becomes more efficient as output increases. The fact that the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases suggests that the firm is experiencing economies of scale. Therefore, choice C is the best answer. Choices A, B, and D are not supported by the information given.

If the Minimum Points of All the Possible Short-Run Average