Long run average total cost declines as output increases
Long run average total cost rises as output increases
Long run average total cost does not vary with the level of output
Long run fixed cost stays constant as output increases
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The Correct Option isA
Solution and Explanation
Economies of scale occur when increasing the level of production leads to lower per-unit costs. This happens due to factors like bulk purchasing, better utilization of fixed costs, and operational efficiencies.