It is common in large breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate with:
A)diseconomies of scale.
B)diminishing marginal returns.
C)economies of scale.
D)constant returns to scale.

Question

Quizplus · Accepted Answer

Since the long-run average total cost declines as output increases, it indicates that the brewery is experiencing economies of scale. This means that as the brewery increases production, the cost of production per unit decreases, resulting in a more efficient use of resources and lower costs.

It Is Common in Large Breweries for the Long-Run Average