Graphically, economies to scale are illustrated by
A) a downward sloping long-run average cost curve.
B) a horizontal long-run average cost curve.
C) an upward sloping long-run average cost curve.
D) a long-run average cost curve that is shaped like an upside down U.

Question

Quizplus · Accepted Answer

Economies of scale are represented by a downward sloping long-run average cost curve. This indicates that as production increases, the average cost per unit of production decreases due to various factors such as specialization, better technology and increased efficiency.

Graphically, Economies to Scale Are Illustrated by