As the total output increases, economies of scale lower costs because the total fixed costs required to produce the higher volume of output are lowered.

Name: As the total output increases, economies of scale lower costs because the total fixed costs required to produce the higher volume of output are lowered.
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Question

Quizplus · Accepted Answer

Economies of scale lower costs because the fixed costs are spread over a larger volume of output, not because the total fixed costs themselves are lowered.

As the Total Output Increases, Economies of Scale Lower Costs