When a firm experiences economies of scale, its _______ cost curve slopes _______ as output increases.
A) long- run average; downward
B) short- run average total; downward
C) long- run average; upward
D) short- run marginal cost; downward

Question

Quizplus · Accepted Answer

Economies of scale occur when a firm's long-run average costs decrease as its output increases, indicating that it becomes more efficient as it produces more. This is represented by a downward-sloping long-run average cost curve.

When a Firm Experiences Economies of Scale, Its _______ Cost