A) A firm experiences economies of scale if its average total cost ________ ...

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)

Create a free account to get started

Unlock full course notes by signing up

  • Video lessons taught by top educators
  • Practice questions with guided solutions
  • Written review notes for reference
  • Expert answers anytime from course tutors
Sign Up FreeSign In

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