Economies of scale occur when there are : (A) increases in long-run average costs when output increases. (B) no changes in long-run average costs when output increases. (C) decreases in long-run average costs resulting from increases in output. (D) decreases in output resulting from decreases in input.

Question

Emma Atkinson

Social Studies

4 February, 15:59

Economies of scale occur when there are : (A) increases in long-run average costs when output increases. (B) no changes in long-run average costs when output increases. (C) decreases in long-run average costs resulting from increases in output. (D) decreases in output resulting from decreases in input.

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Answers (1)

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Damaris Ruiz · Answer 1

(C) decreases in long-run average costs resulting from increases in output.

Explanation:

Economies of scale are those where the larger the scale of operation of a company is (increases in output), the smaller the cost per unit of output is (decreases in average costs). This concept applies to a great variety of companies, and it was first developed by Adam Smith. It is also the opposite of disectomies of scale.