Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.
-Refer to Figure 13-9. The firm experiences economies of scale at which output levels?
A)output levels less than M
B)output levels between M and N
C)output levels greater than N
D)All of the above are correct as long as the firm is operating in the long run.

Question

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9. The firm experiences economies of scale at which output levels?
A)output levels less than M 
B)output levels between M and N 
C)output levels greater than N 
D)All of the above are correct as long as the firm is operating in the long run.

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to lower average costs. This typically happens at lower levels of output, which is indicated by output levels less than M in the context of the figure.

Figure 13-9 the Figure Below Depicts Average Total Cost Functions for a for a Firm