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A) A firm experiences economies of scale if its average total cost (increases…

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Wize University Microeconomics Textbook > Production and Costs

Long Run Costs

2 Activities

A) A firm experiences economies of scale if its average total cost
(increases/decreases/remains constant as its output increases)

B) A firm experiences diseconomies of scale if its average total cost
(increases/decreases/remains constant as its output increases)

C) A firm experiences constant returns to scale if its average total cost
(increases/decreases/remains constant as its output increases)
More Long Run Costs Questions:
Economies of scale occurs when
Practice Long run
The diagram below shows the LRAC for a firm. The SRATC curves 1-5 refer to different plant sizes.
In the long run, the lowest cost level of output achievable by this firm is at point