Economies of scale over the entire range of market output
A)Lead to higher levels of competition.
B)Become a low barrier to entry,preventing a market from being contestable.
C)Mean that as the size of a firm increases,its minimum average total costs rise.
D)Mean that the long-run average total cost curve is downward-sloping.

Question

Quizplus · Accepted Answer

Economies of scale over the entire range of market output indicate that the long-run average total cost curve is downward-sloping. This means that as the size of a firm increases, the average cost of producing each unit of output decreases. Therefore, larger firms have a cost advantage over smaller firms.

Economies of Scale Over the Entire Range of Market Output