When economies of scale exist, an increase in the level of output will lead to:

Name: When economies of scale exist, an increase in the level of output will lead to:
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Question

Quizplus · Accepted Answer

Economies of scale occur when the cost per unit decreases as the level of output increases. This means that as production increases, the fixed costs spread out over more units, resulting in lower per-unit costs. Therefore, an increase in the level of output will lead to a decrease in cost per unit.

When Economies of Scale Exist, an Increase in the Level