Asked by Mckenna Grimm on May 09, 2024

verifed

Verified

A firm that is able to use its inputs more efficiently as it increases production in the long run BEST demonstrates:

A) economies of scale.
B) diseconomies of scale.
C) labor-intensive production.
D) capital-intensive production.

Economies of Scale

The cost benefits that organizations gain from their operation size, where the cost for each unit of output typically reduces as the scale increases.

Inputs

Inputs are the resources used in the production process to create goods or services, including labor, raw materials, machinery, and capital.

Production

The process of creating goods or services by combining labor, machinery, and materials resources.

  • Acquire insight into the theories of economies of scale, constant returns to scale, and diseconomies of scale.
  • Identify the correlation between the amount of inputs and the efficiency of production.
verifed

Verified Answer

CM
Carmen MejiaMay 15, 2024
Final Answer :
A
Explanation :
Economies of scale refer to the cost advantages that a firm can achieve by increasing its production. In this case, the firm is able to use its inputs more efficiently as it increases production, which suggests that it is benefitting from economies of scale.