Decreasing-cost industries find that their costs fall as a consequence of an inc

Question

Decreasing-cost industries find that their costs fall as a consequence of an increased demand for their product because of

Question 9 options:

higher resource prices leading to higher costs of production

the economies of scale leading to lower resource prices and lower costs of production

an increased supply of the product

diminishing returns

A)

higher resource prices leading to higher costs of production

B)

the economies of scale leading to lower resource prices and lower costs of production

C)

an increased supply of the product

D)

diminishing returns

Explanation / Answer

Answer

option B

the economies of scale leading to lower resource prices and lower costs of production

The increase in production decreases average total cost because of the economics of scale and that decreases the cost of production per unit as production increases.

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