Under which of the following situations, economies of scale exists to the potential and persists?
Economies of scale exist and persist when a firm's Long-Run Average Cost (long-run cost of producing a unit of output) declines as the scale of output increases. This…
Choose your answer
Under which of the following situations, economies of scale exists to the potential and persists?
Answer and explanation
Correct answer D
Economies of scale exist and persist when a firm's Long-Run Average Cost (long-run cost of producing a unit of output) declines as the scale of output increases. This downward slope of the LRAC curve results from technical, managerial, financial, and marketing efficiencies achieved at larger production volumes.
Practice for these exams
-
UGC NET Commerce