Question

Economies of scale exist whenever: a. average total costs are stationary as output increases. b. average total costs decline as output increases. c. average total costs increase as output increases and average variable costs are stationary as output increases. d. average total costs increase as output increases.

Answer 1

Answer:

b. average total costs decline as output increases.

Explanation:

Economies of scale refer to the cost advantage when it become reaped by the companies in the case when there is an efficient production

As the cost would be allocated to the larger number of goods. Here cost would be fixed as well as variables one. ALso, in this the size of the organization would matter a lot

So when the output would rise the average total cost would fall

Therefore the option b is correct