Recall the Application about scale economies in the production of electricity from wind to answer the
following question(s).
-Recall the Application. Since a large or small wind turbine have the same installation, operating and maintenance costs, but a large turbine has four times the generating capacity but costs less than three times as much as a small turbine, the wind power industry faces decreasing returns to scale.

Question

Quizplus · Accepted Answer

The wind power industry faces increasing returns to scale because the cost per unit of capacity decreases as the size of the turbine increases, given that a large turbine has a higher capacity but costs proportionally less.

Recall the Application About Scale Economies in the Production of Electricity