Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.
-Refer to Figure 13-9. At levels of output less than M, the firm experiences
A)economies of scale.
B)diseconomies of scale.
C)constant returns to scale.
D)both diminishing marginal productivity and coordination problems.

Question

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9. At levels of output less than M, the firm experiences
A)economies of scale. 
B)diseconomies of scale. 
C)constant returns to scale. 
D)both diminishing marginal productivity and coordination problems.

Quizplus · Accepted Answer

At levels of output less than M, the firm experiences economies of scale, where increasing production leads to lower average costs.

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