When a firm is reaping economies of large-scale production, it experiences a fall in its?

Assessment: JAMB UTME - Economics - 1998 Subject: Economics

Question 1 Report

When a firm is reaping economies of large-scale production, it experiences a fall in its?
Answer Details
When a firm is experiencing economies of large-scale production, it means that the cost per unit of output is decreasing as the level of production increases. Therefore, the firm will experience a fall in its long-run average cost. This occurs because as production increases, the firm can spread its fixed costs over more units, which reduces the average cost per unit. In other words, the more the firm produces, the lower the cost per unit.
Read lesson note on Theory Of Costs (JAMB)
Read lesson note on The Theory Of Demand (JAMB)
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