Use the figure below to answer the following question. Figure 10.4.3 -Refer to Figure 10.4.3 which shows a firm's long-run average total cost curve.When production increases from Q₁ to Q₂ sweaters per day,the firm experiences A)a decrease in fixed costs. B)economies of scale. C)diseconomies of scale. D)constant total costs. E)constant returns to scale.

Question

Quizplus · Accepted Answer

When production increases and the long-run average total cost decreases, the firm experiences economies of scale. This means the firm becomes more efficient and the cost per unit of output decreases as production increases.

Use the Figure Below to Answer the Following Question