Question

economies of scale refer to:
select one:
a. lower productivity
b. higher fixed costs per unit
c. higher taxes
d. lower average costs as output increases

Explanation:

Economies of scale is an economic concept where increasing production output leads to a decrease in average total cost, as fixed costs are spread over more units and operational efficiencies are achieved. Options a, b, and c are incorrect: lower productivity (a) and higher fixed costs per unit (b) contradict the definition, while higher taxes (c) are unrelated to scale effects on costs.

Answer:

d. Lower average costs as output increases