Question

Economies of scale exist when a firm's long run average cost _____ as it increases the quantity of output it produced.

Answer 1

Economies of scale exist when a firm's long run average cost decreases as it increases the quantity of output it produces.

Step-by-step explanation:

Economies of scale exist when a firm's long run average cost decreases as it increases the quantity of output it produces. This means that as a firm expands its production and increases the scale of its operations, it can benefit from lower average costs per unit of output. For example, a factory that produces semiconductors may experience economies of scale up to a certain output level, where the average cost of production declines.