Electric utility companies have built larger and larger electric generating stations and, as a result, the...
Electric utility companies have built larger and larger electric generating stations and, as a result, the long-run average cost of producing each kilowatt hour decreased. This is an example of
A) increasing marginal returns.
B) diminishing marginal returns.
C) economies of scale.
D) diseconomies of scale.
Homework Answers
Option C
- Any company or a firm is said to have an Economies of scale if they are able to increase their level of production and as a result lower their per unit costs of production.
- Here in this question, electric companies gained cost advantage by building large electric generating stations at a lower average cost of producing each kilowatt hour. Hence they are said to have greater Economies of scale.
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Electric utility companies have built larger and larger electric
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