Suppose that a firm's long-run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)coordination problems.

Question

Quizplus · Accepted Answer

Economies of scale refer to the situation where long-run average total costs (LRATC) decrease as production increases. In this scenario, the LRATC decreases as the firm produces more televisions between the range of 10,000 and 20,000, indicating economies of scale. Choice A is the best answer.

Suppose That a Firm's Long-Run Average Total Costs of Producing