Question:

A long-run cost function for a product exhibits economies of scale if

Updated On: Oct 1, 2024
  • average cost of production increases when the output increases.
  • the production function has decreasing returns to scale.
  • average cost of production falls as the output increases.
  • average cost of production remains constant as the output increases.
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The Correct Option is C

Solution and Explanation

The correct option is (C): average cost of production falls as the output increases.
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