As a firm produces more and more CDs,the average cost of producing each CD falls.A curve showing the behavior of the average cost of a CD as more CDs are produced
A) would be positively and then negatively-sloped.
B) would be positively sloped.
C) would be horizontal.
D) would be negatively sloped.

Question

Quizplus · Accepted Answer

This is because as the firm produces more CDs, it can take advantage of economies of scale, which result in lower average costs per unit. Therefore, the curve showing the behavior of the average cost of a CD as more CDs are produced would be negatively sloped.

As a Firm Produces More and More CDs,the Average Cost