Chapter 56, Problem 6MCQ

To determine

What a firm is experiencing if the long-run average total cost decreases as the quantity of output increases.

Explanation of Solution

If the long-run average total cost decreases as the quantity of output increases for a firm then the firm is experiencing economies of scale.

Therefore, the correct option is c.

Economics Concept Introduction

Introduction:

When the production becomes efficient for the firm and it gets cost advantage then it is a situation of economies of scale.