Economies of scale refer to the range of output over which
A) marginal cost exceeds average cost.
B) the long-run average cost falls as output increases.
C) the marginal product of labor diminishes.
D) the long-run average cost is lower than the short-run average total cost.

Question

Quizplus · Accepted Answer

Economies of scale refer to the range of output over which the long-run average cost falls as output increases. This means that as a firm produces more output, it can spread its fixed costs over a larger quantity of output, resulting in lower long-run average costs.

Economies of Scale Refer to the Range of Output Over