When the long-run average total cost curve is horizontal, a firm has economies of scale.

Name: When the long-run average total cost curve is horizontal, a firm has economies of scale.
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When the long-run average total cost curve is horizontal, it indicates that the firm is experiencing constant returns to scale - that is, the firm is able to increase its output without any change in its average total cost. It does not indicate economies of scale which would indicate a downward sloping LRATC curve.

When the Long-Run Average Total Cost Curve Is Horizontal, a Firm