Question

If a firm finds that it could reduce its long-run average total cost by increasing output, then it must be experiencing Use letters in alphabetical order to select options A coordination problems. B diseconomies of scale. C constant returns to scale. D economies of scale.

Answer 1

D economies of scale.

Step-by-step explanation:

Economies of scale are cost advantages obtained with cost per unit of output reducing with an increasing scale.

Economies of scale occur when average costs begin to fall as output increases.

If the firm finds out it could reduce its long-run average total cost by increasing output, then it is experiencing economies of scale.