-In the above figure, for any output level less than Q2, this firm experiences
A) economies of scale.
B) diseconomies of scale.
C) constant economies of scale.
D) decreasing long run average costs.

Question

-In the above figure, for any output level less than Q2, this firm experiences
A) economies of scale. 
B) diseconomies of scale. 
C) constant economies of scale. 
D) decreasing long run average costs.

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs. For output levels less than Q2, the firm benefits from economies of scale, meaning costs decrease as production increases.

-In the Above Figure, for Any Output Level Less Than