Economies of scale occur when a company is operating _______________________.
A) at its best operating level and increases its output
B) at its best operating level and decreases its output
C) below its best operating level and decreases its output
D) above its best operating level and increases its output
E) below its best operating level and increases its output

Question

Quizplus · Accepted Answer

Economies of scale occur when a company increases its output and reduces the average cost per unit, which typically happens when operating below its best operating level and then increasing output.

Economies of Scale Occur When a Company Is Operating _______________________