Question

Complete the sentence. A firm that can use​ cost-saving equipment and highly specialized labor as the scale of production increases experiences​ _______. A. falling normal profit B. economies of scope C. economies of scale D. falling economic profit

Answer 1

C. economies of scale

Step-by-step explanation:

As in the given instance the company uses the cost saving equipment accordingly the cost is saved with economies of scale, although, the labor is specialized and therefore, will cost high, but there will be per unit cost decreasing.

This is because the economies of scale refers to the situation as per economics where the cost per unit of a product tend to decrease with the increase in volume of production.

Here also as there is increase in production and use of cost saving equipment will lead to economies of scale.