The Basic Notion of Economies of Scale Is That as a Plant

question 68

True/False

The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.

---

Definitions:

Output

The quantity of goods or services produced within a given time period.

Factor Prices

The costs of the inputs that are used in the production of goods or services.

Production Function

A mathematical relationship describing the maximum output possible from a given set of inputs.

Units Of Output

The total quantity of goods or services produced by a company or industry in a specific period.