Because there are very significant economies of scale involved in making flat screen television sets in a competitive market, the price of flat screen TVs will:
A) fall as output expands because long-run average total costs are lower for higher quantities.
B) rise because the long run average total cost curve is upward-sloping over the entire range of output.
C) rise because of the combination of stronger demand and higher production costs.
D) stay exactly the same regardless of any shifts in the demand curve.

Question

Quizplus · Accepted Answer

Economies of scale mean that as production increases, the average cost per unit decreases, leading to lower prices in a competitive market.

Because There Are Very Significant Economies of Scale Involved in Making