Asked by
Vasile Ivascu
on Nov 17, 2024
Verified
When a firm experiences economies of scale, long-run average total cost falls as the quantity of output increases.
Economies of Scale
The cost advantages that enterprises obtain due to their scale of operation, resulting in a decreased cost per unit.
Long-run Average Total Cost
The long-run average total cost is the per-unit cost of production when all inputs can be adjusted, reflecting the most cost-efficient scale of operation.
- Understand the concept and implications of economies of scale and diseconomies of scale.
- Comprehend the difference between rising, falling, and constant long-run average total costs.
Verified Answer
TO
Learning Objectives
- Understand the concept and implications of economies of scale and diseconomies of scale.
- Comprehend the difference between rising, falling, and constant long-run average total costs.