When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.
A) economies of scale; a larger factory can produce at a lower average cost than a smaller company.
B) economies of scale; a smaller factory can produce at a lower average cost than a larger company.
C) low labor inputs; larger scale of production leads to higher costs.
D) labor inputs; economies-of-scale curve is U-shaped.

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing the scale of production leads to a lower cost per unit of output, meaning a larger factory can produce at a lower average cost than a smaller one.

When __________________ Exist, Doubling of All Inputs Will Result in More