A firm that is able to use its inputs more efficiently as it increases production in the long run BEST demonstrates:
A) economies of scale.
B) diseconomies of scale.
C) labour-intensive production.
D) capital-intensive production.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost savings that a firm experiences as it increases production in the long run, due to the ability to use inputs more efficiently. Therefore, a firm that is able to achieve cost savings through increased efficiency is demonstrating economies of scale.

A Firm That Is Able to Use Its Inputs More