Question

in the long run, firms in many industries often experience a falling average total cost curve as a result of:
a. economies of scale.
b. increasing marginal returns.
c. lower fixed costs.
d. gains through trade.

Explanation:

• Economies of scale occur when a firm's long-run average total cost decreases as output increases, which matches the question's scenario.
• Increasing marginal returns are a short-run concept, not long-run.
• Fixed costs do not exist in the long run, as all inputs are variable.
• Gains through trade relate to exchange between parties, not a firm's internal cost curves.

Answer:

a. economies of scale.