Economies of Scale Occur When ________

question 62

Multiple Choice

Economies of scale occur when ________.

• A) increasing production lowers the average cost of each unit produced
• B) increasing production increases the average cost of each unit produced
• C) decreasing production lowers the average cost of each unit produced
• D) decreasing production increases the average cost of each unit
• E) increasing production increases the fixed cost of doing business

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Definitions:

Public Goods

goods that are non-excludable and non-rivalrous, meaning they can be used by everyone simultaneously without diminishing their availability to others.

Market Mechanism

The process by which supply and demand interactions determine prices and quantities of goods and services in an economy.

Voluntary Contributions

Monetary or non-monetary donations made by individuals or organizations to a cause or project without the expectation of direct financial return.

Market-Oriented Economy

A market-oriented economy is one where economic decisions and the pricing of goods and services are guided by the interactions of individuals and businesses in the marketplace.