Economies of scale exist when
A)fixed cost decreases as output increases.
B)long-run average cost decreases as output increases.
C)long-run marginal cost is less than long-run average cost.
D)both a and b
E)both b and c

Question

Quizplus · Accepted Answer

Economies of scale occur when long-run average costs decrease as output increases (B), and when long-run marginal cost is less than long-run average cost (C), indicating that producing additional units is cheaper.

Economies of Scale Exist When