The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-If a firm doubles its resources and generates an output level which is more than double, it is said to be experiencing:
A)economic fluctuations.
B)recession.
C)diseconomies of scale.
D)increasing marginal returns to a factor.
E)economies of scale.

Question

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5
 
-If a firm doubles its resources and generates an output level which is more than double, it is said to be experiencing:
A)economic fluctuations. 
B)recession. 
C)diseconomies of scale. 
D)increasing marginal returns to a factor. 
E)economies of scale.

Quizplus · Accepted Answer

When a firm doubles its resources and generates an output level which is more than double, it is experiencing economies of scale. This means the firm is becoming more efficient, reducing the average cost per unit through increased production.

The Table Given Below Shows the Average Total Cost of Production