In the typical AC curve, the downward-sloping part is attributable to
A)spreading fixed costs over larger outputs and increasing returns to the variable inputs.
B)declining administrative costs as output increases.
C)falling fixed costs.
D)rising total product.

Question

Quizplus · Accepted Answer

The downward-sloping portion of the AC curve is known as the economies of scale region, where spreading fixed costs over larger outputs leads to a decrease in average cost per unit produced. This is due to increasing returns to the variable inputs (e.g. labor, raw materials) as the production volume increases.

In the Typical AC Curve, the Downward-Sloping Part Is Attributable