A decrease in long-run average costs resulting from increases in output is
A) attributed to economies of scale.
B) attributed to diseconomies to scale.
C) attributed to constant returns to scale.
D) attributed to the law of diminishing marginal product.

Question

Quizplus · Accepted Answer

A decrease in long-run average costs resulting from increases in output is known as economies of scale. This occurs when a firm experiences lower average costs due to increased efficiency in production as output increases.

A Decrease in Long-Run Average Costs Resulting from Increases in Output