If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

A) economies of scale.
B) diseconomies of scale.
C) coordination problems arising from the large size of the firm.
D) fixed costs greatly exceeding variable costs.

Long-run Average Total Cost

The per-unit cost of production when all inputs, including those typically fixed, can be varied, showing economies of scale if downward sloping.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the average cost of production falls with increasing output.