When do economies of scale occur
A)when long-run average total costs rise as output increases
B)when long-run average total costs fall as output increases
C)when average fixed costs are falling
D)when average fixed costs are constant

Question

Quizplus · Accepted Answer

Economies of scale occur when long-run average total costs fall as output increases. This is because when production is increased, the average cost of production decreases due to factors such as better utilization of resources, improved technology, and specialized division of labor. This decrease in average cost leads to economies of scale, and businesses can experience significant cost savings and increased efficiency.

When Do Economies of Scale Occur