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JAMB Economics 1982 Question 9

Question 9

Theory of Production

A firm whose costs of production decrease as it continues to increase its output is said to be enjoying

  1. A.profit maximization
  2. B.large-scale production
  3. C.a windfall
  4. D.government subsidies
  5. E.economies of scale.
Show the answer and explanation

Answer: E (economies of scale.)

Explanation

Economies of scale are the cost savings a firm gets as it grows, so its average cost falls as output rises.