Which of the following is true regarding economies of scale?
A)It is another term for constant returns to scale.
B)They are present only in pecuniary forms.
C)They exist in both the short run and the long run.
D)They are cost advantages that are achieved as a result of large-scale operations.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that result from increasing the scale of production. As the scale of production increases, the costs of producing each unit of output decrease, leading to lower average costs. This is achieved through various factors such as specialization of labor, bulk buying of inputs, and efficient use of capital. Economies of scale are typically achieved in the long run when a firm has enough time to adjust its production capacity to meet the demand for its products.

Which of the Following Is True Regarding Economies of Scale