In recent years, the number of farms has fallen while the average farm size has increased. Which of the following concept may explain this phenomenon?
A)Diminishing marginal returns
B)Declining productivity
C)Diseconomies of scale
D)Economies of scale
E)Poor economic reforms

Question

In recent years, the number of farms has fallen while the average farm size has increased. Which of the following concept may explain this phenomenon?​
A)Diminishing marginal returns
B)Declining productivity​
C)Diseconomies of scale​
D)Economies of scale​
E)Poor economic reforms​

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that arise with increased production. As farms become larger, they can typically take advantage of these cost savings, which in turn allows them to increase in size even further. This helps explain why the average farm size has increased even as the number of farms has fallen.

In Recent Years, the Number of Farms Has Fallen While