If there are no fixed costs in the long run,how can it be said that economies of scale arise from spreading fixed costs over more units of output?
A)Economies of scale is a short run phenomenon,and so diminishing returns is the root cause of scale economies.
B)Costs of quasi-fixed inputs get spread over more units of output whichdrives down average cost in the long run.
C)Average fixed costs decline continuously as output rises.
D)Long-run average cost falls because all fixed costs are sunk.

Question

If there are no fixed costs in the long run,how can it be said that economies of scale arise from spreading fixed costs over more units of output? 
A)Economies of scale is a short run phenomenon,and so diminishing returns is the root cause of scale economies.
B)Costs of quasi-fixed inputs get spread over more units of output whichdrives down average cost in the long run.
C)Average fixed costs decline continuously as output rises.
D)Long-run average cost falls because all fixed costs are sunk.

Quizplus · Accepted Answer

Even in the long run, there may be quasi-fixed inputs (such as equipment or machinery) whose costs are not directly tied to the level of output but are spread out over a larger number of units as production increases, leading to economies of scale. Therefore, choice B is the best answer. Choice A is incorrect because economies of scale can also occur in the long run, not just in the short run. Choice C is incorrect because average fixed costs are not the only relevant costs in determining economies of scale. Choice D is incorrect because sunk costs are not relevant in determining economies of scale in the long run.

If There Are No Fixed Costs in the Long Run,how