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mars1129 [50]
3 years ago
15

When a firm is experiencing economies of scale, long-run a. average total cost is minimized. b. average total cost is greater th

an long-run marginal cost. c. average total cost is less than long-run marginal cost. d. marginal cost is minimized.
Business
1 answer:
USPshnik [31]3 years ago
7 0

Answer:

A. Average total cost is minimized

Explanation:

Economies of scale refers to the cost advantages a firm enjoys when production becomes efficient. Economies of scale can be achieved by increasing production and and lowering cost of production.This is because cost are spread over a larger number of goods, thereby, making per unit cost cheaper.

There are two types of cost

1. Fixed cost: They are cost that doesn't change during the production process. Such as buildings, furnitures and fittings, machineries.

2. Variable cost: They are cost that changes with production process such as cost of raw materials.

When a firm is experiencing economies of scale, long-run, average total cost is minimized.

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